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However, one of the things that struck me the most was the following:
MasterCard will consider a credit (refund) as a chargeback if MasterCard believes, that the credit is generated to avoid the application of these rules, such as for ANY of the following situations:
- As substitute for chargebacks
- If merchants fail to provide satisfactory customer services
- If credits are equal to or greater than chargeback rates
- As a settlement to resolve fraud or customer service issues
Each credit processed will be fined with a recovery fee of USD 25.00
Isn't this where a credit is normally issued for in the 1st place? Or at least in 95% of the cases.
It's becoming more and more obvious to me that MasterCard is clearly earning money for b*llsh*t reasons. I was on one hand very happy to hear that they have increased the allowed chargebacks from 15 to 50 but after reading this credit penalty fee, it seems they have changed one bad thing for another.
How do you guys feel about this?
Is this a normal procedure?
I have never paid for any credit as far as I know.
[edited by: Miklo at 1:44 pm (utc) on Oct. 12, 2006]
Course you get a 1.5 increase in chage on the refund as well so if you have refunded a customer after the card has been processed and the batch as been processed you have indeed paid for a credit.
2.5 process fee and a 4% refund fee so on a bad order or refunded order you actually pay 6% plus .25 per so add another .50 in there as well.
We are getting were we are very careful on this due to the actual cost you really never see till the end of the month when you are charged for processing fees.
According to the new regulations, MasterCard will charge you 25 USD for every credit if THEY believe the credit is generated to avoid a possible chargeback.
This, to me, sounds ridiculous.
If the issuing bank has issued the chargeback, chances are the fee will still be there. Some processors also charge a another fee as well on top of the chargeback fee
Back on topic: I think that if what you said is true about the credit card company ... if they believe ... is a bad thing.
It's not about giving a credit to avoid a chargeback, its about CUSTOMER SERVICE. If you, like most companies take your customer's happiness seriously, then if they feel they have not received a good product in exchange for the price paid, and want their money back, unless there is a really good reason to not refund them, you will. You certainly don't want one unhappy customer telling 100 about your bad customer service and product.
The credit card company would certainly have lost more revenue opportunity if you as a merchant won't give a refund because it looks like its to avoid looking like a chargeback and then that customer goes and tells 100 other customers to not do business with you.
We have received information from this from our processor in a special information bulletin regarding the new MasterCard Excessive Chargeback Programme and I almost overread it until a colleague of mine showed it to me.
We are talking about refunds here, not chargebacks.
MasterCard will consider a credit as a chargeback in the following situations:
4. As a settlement to resolve fraud or customer service issues. (!)
So, in general, if a customer contacts you and they tell you they have been charged by you and their card has been misused and stolen and you say, okay, well, I'll give you a refund (of course, after you have made sure that it is in fact a fraudulent order) MasterCard can still say to you: Sorry, we are charging you 25 USD for this refund.
You can only imagine how much MasterCard earns in one day by just processing refunds!
Right now the CC companies have merchants over a barrel - but if things keep getting worse, maybe Google will save us all and come out with something new.......
What are we supposed to do? When a person calls and asks a QUESTION to M/C/Visa, they institute a chargeback.
((Sigh))So few hours in the day, so many ways to get shafted.
It sounds like MasterCard wants to make more money. Seems very greedy and evil of MasterCard to charge such a fee when we have already lost the product we shipped, the cost of shipping, handling, time, and the order total originally paid to us. I think that's penalty enough.