Credit Card disputes and chargebacks...

[JMortensen]

A few weeks ago I posted to a thread where a customer was getting screwed by a shop and I said that he should dispute the charges with his credit card. Since then I've seen a couple more people saying they were going to dispute charges, possibly unfairly. I have worked for a number of mail order companies, and also a credit card processing house where I was part of the Risk Management team that assessed dispute and chargeback ratios and CLOSED DOWN accounts on a regular basis. Here are some guidelines for disputing and the consequences of those actions.

 

When you make a big purchase, do it on your credit card. It gives you some recourse should there be a problem and should the merchant be totally unwilling to work with you.

 

When you have a problem, CALL THE MERCHANT. Many times installation issues and problems with products that you are unfamiliar with can be explained or solved with a phone call. 99% of the businesses out there are not there to screw you. They say a happy customer tells one person, and an unhappy one tells 20. This is true, and businesses know it.

 

Many things that I have bought through mail order businesses were damaged in shipping, or were not correct for my application, and this was only realized when the product arrived. THIS IS NOT NECESSARILY THE FAULT OF THE BUSINESS WHO SOLD YOU THE GOODS! Shipping damage happens. Wrong products are ordered. I've seen it happen 100's of times, and that is not always the merchant's fault.

 

The end result of the call to the merchant may be the return of the item purchased. This should NOT make the transaction an adversarial experience. That's simply the way mail order works. The trade off for getting a great deal is that the merchant may be all the way across the country, and shipping charges will cost $$$. Unfortunately, you have to buy based on a description or a picture often times. In some instances you will get your return shipping free of charge, in some you will be required to pay for return shipping. There should be a stated shipping policy for any mail order business. IF YOU ARE IN DOUBT, CHECK THESE POLICIES BEFORE YOU ORDER! BUYER BEWARE!

 

Disputes and chargebacks cost merchants $$$. They should not be done because you don't like what you ordered, or because of damage in shipping. They should be a last resort. If you have called the merchant and they are totally unwilling to fix the problem or accept a return and unwilling to refund you for FAULTY work or for providing products that are FLAWED, then dispute the charges with your cc.

 

All credit card merchants have records on file of how many charges they have made, and how many disputes have been filed. When they get too large a percentage of disputes vs charges, their accounts can be shut down entirely. I've been the person who shuts the accounts down. This is not a pleasant experience for any merchant. I had to shut down accounts that I felt were not owned by crooks, but by companies who didn't communicate effectively with their customers. I also shut down lots of companies that WERE crooks.

 

When your neighbor's dog is barking in the middle of the night, what do you do? Do you call the police, or go talk to the guy? I think that this is a good analogy. Talk to your neighbor, and talk to the business before you call in the big guns. Give them a chance to make it right. It is YOUR responsibility as a customer to let them know that you are having a problem. When you bypass the merchant and go straight to the cc company YOU are the @sshole.

 

Too many people jump to the conclusion that "That guy screwed me, so now I have to get back at him." 99% of the time, this is simply not the case.

 

I only bring this up because I feel at least in part responsible for the discussion that has lead to a number of people saying that they are going to dispute charges. As a business owner and with my prior experience in Risk Management, I want to let everyone know that disputes and chargebacks should be a LAST RESORT.

 

Jon

[auxilary]

I agree. I've bought plenty of stuff online and via phone order on my credit card. Fortunately (knock on wood), having owned a visa for 5 years, I've never had to file a dispute against a company. If I ordered something wrong, I'd either return it, or if the shipping costs were too much, I just sold it off at a small loss to me.

 

My last return was kind of funny. I was pre-ordering Indiana Jones trilogy on dvd from amazon.com, and they had a link to another dvd site that had it listed for $15 cheaper than other places. Nowhere in the fine print did it say that this would be an order from Hong Kong, and the trilogy would be laserdisk versions ripped and burned onto DVDs.

 

I realized it after submitting an order, and asked if I could cancel the order. The pirated dvd set already shipped, but the guy emailed me back saying to deny the shipment, return it back across the atlantic, and he'll refund me the money. I was skeptical, because if I return it, I'm out $35 bucks including shipping, and nothing to show for it. But, I gave it a chance, and emailed him back telling him that I denied shipment (which I did). True enough, next day on my online banking statement there was a credit for the money I paid, exact refund including cost of shipping.

 

Props to him for excellent customer service, despite the fact that it would've been easy as pie to rip me off since I can't do anything to a guy across the world. (and no, I didn't want illegal copies of the product. I ordered the right set the next day, and now I have the official remastered trilogy at home. and it's good quality, go buy it!)

 

-alex

[Guest Anonymous]

Working for Bank One Card Services for a period of time I can attest all that was said is TRUE.