Forum Moderators: buckworks
Today I received the following letter:
Based upon our reasonable business judgment we have decided that it is necessary to place your merchant account on our immediate Full Recourse program.Accordingly, if any customer disputes a Charge at your establishment, AE will immediately chargeback your merchant account for the full amount of such Disputed Charge without contacting you or sending you an inquiry. You will not have the opportunity to present any written substantive response to Disputed Charges for which we have exercised immediate Full Recourse.
Your merchant account statement will itemize all your account activity including any and all chargebacks.
Not believing what I read I just called AE and asked them “what’s going on?”. I was told since I was a high risk merchant (Internet Ecommerce business) I was put on this policy. I said this is a license to steal. They said it would be up to me to collect if there was a chargeback – right, good luck to me with that.
Since I went through the trouble of setting up my merchant account to accept this card I’ll take it for now but I certainly won’t publicize that I take AE as they suggest during their sales pitch to convince me to take it. Also, first sign of a fraud pattern it gets the axe.
American Express customers tend to be more loyal and spend a bit more money though. I tell our merchants the pros and cons of accepting American Express and then let them decide. It is a tough decision, but a little extra scrutiny and follow up on American Express orders might help the merchants out.
For example, consider getting a signature if sending out via American Express. Consider sending out a follow up email asking a few simple questions: like did the product come as expected. This way it shows the customer acknowledges receipt of the product (if the reason code is 30 (Services Not Provided or Merchandise Not Received)).
-Corey
However we do use a serious fraud detection service on all of our transactions and only ship to billing on most orders.
Discover card on the other hand is a joke... did you know that if you don't call and get a voice authorization each and every time someone can charge it back and win ... even if you are shipping to the confirmed billing address... even witha signature.
Say you wanted a great new $1,500 digital video recorder. All you need to do is order it online and do a chargeback when you get it and report that you paid with AE and never received it. Even if the merchant has records of you signing for it, records of its shipment, pictures of you using it, it does not really matter because the merchant "will not have the opportunity to present any written substantive response to Disputed Charges."
Heck they won’t even notify an online merchant of a chargeback until they receive their monthly statement. Meanwhile the merchant could be shipping out other items to the scammer.
At least MC and Visa let you respond to a chargeback and notify via fax or email as soon as you get one so the problem can be nipped in the bud.
For those online merchants without a brick and mortar store front please be aware of this policy.
Since I went through the trouble of setting up my merchant account to accept this card I’ll take it for now
If more merchants refuse to accept AMEX because of those policies, then AMEX card holders will complain to AMEX that they can't use their cards online any more, forcing AMEX to rescind the policies.
Yeah, right!
We originally had the same letter, although I think it was just a 6-month probation period because we were a new merchant. Since then, we've had good and bad experiences with AMEX chargebacks. The bad experiences were when AMEX lost all the faxed documentation we sent for several chargebacks (we now mail everything). We take some responsibility for that since we didn't follow up to check on the status. By the time we found out they lost the paperwork, it was past the time we could respond. One was close, so they forced it through anyway. For the others, we had to demand a check from the customers (yes, actually did get checks).
Say you wanted a great new $1,500 digital video recorder
Let me get my AMEX card out, what's the URL to your site ;)
I wouldn't even give them a chance based on their statement!
I will tell you an any online dispute I provide the cc company with the following information:
1) any and all customer contact
2) authorization codes from transactions
3) shipping and billing address
4) item purchased
5) date of purchase
6) ip address where it was ordered from
7) delivery signature. Always have them sign! Always.
8) any other pertinant information regarding the order
Did you know that Amex is the only cc company that will actually call the customer to verify the charge. This covers us and customers from any potential fraud.
visa / mc is 90 days for us.
I think alot of the merchant account disputes and resolution levels may be based on your charge back history. We currently have less than 8 per year and only lost one to a visa.
Did you know that on visa/mc if a person has an account that has two issued cards .. say .. one for the husband and one for the wife that if the original card holder does not approve of the secondary card holders use of the card they can dispute it even if it's shipped to the confirmed billing address of the card? that was the only one we lost this year.
Amex always sends us a letter in the mail prior to any dispute showing up in our monthly statement.
Not for me, according to my 'welcome' letter which specifically states:
"AE will immediately chargeback your merchant account for the full amount of such Disputed Charge without contacting you or sending you an inquiry."
They verified this on my call to them stating that I will find out about chargebacks on my monthly statement and that I would need to resolve any disputes on my own.
I will tell you an any online dispute I provide the cc company with the following information:
1) any and all customer contact
2) authorization codes from transactions
3) shipping and billing address
4) item purchased
5) date of purchase
6) ip address where it was ordered from
7) delivery signature. Always have them sign! Always.
8) any other pertinant information regarding the order
I can and do collect your 1 -8 but what good will it do me, their 'welcome' letter specifically states:
"You will not have the opportunity to present any written substantive response to Disputed Charges "
My business does not sell anything like mp3s or porn that might raise red flags. I have been online for 3 years with only two small visa chargebacks (one because the guy did not recognise the charge). The reason they said I was under the Full Recourse policy is that I run an online business without a store front.
Do a search on: American Express Full Recourse to learn more.
