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About a month ago a guy returned a fairly large item back unannounced, I knew what it was after looking him up and wrote Return to Sender on it.
He did a chargeback and got his money back. Nevermind the fact that I had a tracking number confirming his receipt.
Only had that happen about twice since I've been operating online. But it seems as though those who do this don't think they need to play by the rules - it always turns out messy with people who don't take the time to get the return authorization.
I personally find it disrespectful. Especially when they got everything they initially ordered and are returning something because they "didn't like it" or "changed my mind".
Many customers would do a chargeback in this situation rather then issue a damage claim with the carrier, or have it shipped back COD etc.
You can take pictures of a damaged item and submit these with your chargeback defense which has worked in the past, but it is a long drawn out nasty fight and not worth it unless the item is of considerable value.
I also believe that some customers will purposefully slightly damage an item they don't want and then return it claiming it is defective in order to avoid the restocking fee. When a customer claims an item is defective but does not want a replacement this is sometimes the case.
Regardless of what's on my invoice, I tend to lose 99% of chargebacks. In PayPal's complaint system though, I win the majority of those, unless the customer doesn't give me a chance to explain the details of the purchase/shipping and goes straight ahead to let PayPal decide the outcome. (A seller cannot defend themselves if they have no room to explain! Often times, a chargeback results in miscommunication or impossible expectations [by the buyer])
Forcing the customer to communicate is a step in the right direction for PayPal. I wish Visa and Mastercard would follow suit!
In my opinion it is a gamble. First, if a customer does a chargeback you get charged the chargeback fee, that is not refunded even if you win. Second, you certainly can win a reversal but if they dispute it again I feel you will lose. For us, the time and money involved in the entire dispute process isnt worth it and eventually chargebacks will raise your merchant rates. We eat the cost on unannounced returns and so far it has worked out great.
But...all hail the mighty dollar! In the end, I'd do some math and determine what is most cost effective for your particular situation. I am able to assess a restocking fee and have never encountered a problem, besides complaining. Then again, my customers are usually one-time shoppers and I do have some widgets which beg for "rental" type usage. So, I put my restocking fee prohibitively high (30%) with a note about restocking fees being assessed on an individual order basis. I use my loophole as a negotiating tactic...if you're a reasonable person 30% changes to 10% instantly. Most people are satisfied with a lower restocking fee on announced returns and don't bother to do a chargeback once they feel they have gotten some sort of reparation.
The UPS shot putting team is going to the Olympics this year! All that training on my packages has paid off <end sarcasm>
At a meeting with our UPS rep recently, one of our execs had some fun:
Exec: When can I come visit your distribution center in Addison, IL?
UPS Rep: Oh, we would love to have you out there. What times would work for you?
Exec: I just really want to come out and see the giant hand.
UPS Rep: What do you mean? What giant hand?
Exec: You know, the giant hand that sits at the end of a conveyor belt and smacks the everloving BLEEP out of every package we give you.