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She sells widgets to moms and she packs all her orders herself, about 5-7 a day.
A woman placed an order and received a package from us yesterday with one item in it valued at $200. She wrote us an email last night saying she was excited to get her order but when she opened it, it wasn't the item she ordered from the website. OK, maybe twice in the last few years my wife (or me filling in) may have sent the wrong item.
She said she just wants to return it and get her money back. She'll go get a cheaper widget at a store because she needs a widget right now.
In her email she also described the widget. A widget that we have never heard of.
So we emailed and asked her if she could send us a picture of the widget from her order. She got upset and said "I already described it for you. I just don't know why I have to send you a photo and make it more inconvenient for me."
Most people with returns call the 1-800 line because they are very anxious about it. She didn't. My wife called her today and said we need a picture for a UPS claim. She took a picture of this widget sitting in our packing box with our wrapping paper. No tags, no plastic covering it.
Surpise! It was an item we don't sell, never have sold. Looked like some cheap plain (pre-owned) widget.
The woman said the box wasn't tampered with. Not double taped. UPS driver has "MET CUST MAN" as the signing.
Now what?
We've had 4 charge backs in 3 years. Three of the charge backs were a mistake by the customer (didn't remember I ordered it, etc.) And the other one we won.
My wife was inclined to just take the money back from the claim with UPS ($100). I said we should try to force the customers hand a bit.
I think the customer is lying.
Joe
A proffesional chargebacker will put a voice mail number in that they can disconect later
She first emailed that she received the wrong widget, and gave a description of a widget we don't sell. That's why my wife called her, and that's where the hang up occurred.
Unfortunately this is true. Customers are aware of their "rights" and they will use chargebacks to get things for free.
We had this case: a customer orders a widget for Christmas in December, in March we got notice from payplal notifying us that they debited our account due to chargeback. So we filed all the necessary papers, delivery confirmation, signature confirmation, billing and shipping the same. Paypal responded within a month, that from their point of view chargeback is fraudlent and they credited our account back. 2 months later, we got another notice that Visa determined that chargeback filed by customer was "justified" (no explanation at all) and they debited our account again. At this point case was closed and we couldn't do anything at all.
I decided to go after customer directly. I wrote him a polite but straightfarwad letter of demand, stating that our records indicate that he filed fraudlent chargeback agains us (I attached copies of delivery confirmation / signatrue confirmation, etc,) and that he has to pay us back total amount for product + processing fee. If he doesn't do it I will report him to collection agency which will ruin his credit for next couple of years. I gave him 30 days to pay us back.
On day 29th - I received check for full amount :-)
That can really knock the wind out of a sales profit..
I used to make it a point to chase and track people down no matter how much the item, I lost faith when I realised the banks dont look at your findings and the processor is not interested, the only result I would get is like you did a few legal threats but it will only work on a sensitive scared type cardholder and its their first time.
Every now and then you will luck out like you did in receiving a check but when that cardholder realises they can simply put a phone down and get away with it they will.
On day 29th - I received check for full amount :-)
I would then go on to say we have tracked the order back to the cardholders house using IP tracking through their internet service provider, we believe the card holder has either forgoten they made the order or banking fraud is being committed by the card holder, I would then go on to ask had they possibly forgotten they used a credit card and made an order to xyz company.
9/10 if the number was real the cardholder would start saying it must have been my husband we would then tell them you need to contact the merchant and the cardholders bank to straighten it up so we do not have to investigate or pursue further as this is wire fraud and a fellony which can result in a prison term.
Got a few back like that.
Bad checks are better than chargebacks... With a bad check all you need to do is contact your local city attorney and ask for the Bad Check Division you fill in one form copy of the check and the City Attorney automaticaly prosecutes if the check writer does not pay up... its greeeaaaattt!
[edited by: ChargeBackDragon at 5:22 pm (utc) on Aug. 7, 2008]
I agree. If the person is full time scammer not much will help, merchant has to eat the loss. All I am saying is that it is worth trying. At that point you have nothing to loose and still have some chance to get your money back.
Sounds like a banking con to me.
So lets get this straight the bank ok's a card charges the merchant a higher rate because its a high risk category, the bank keeps the original processing fee 4%+ then charges the merchant a fee to process a charge back plus the bank takes all the money back from the merchant, the merchant loses their product on top of all this.
So why the hell are merchants charged a high risk percentage for transactions the only person that ever loses is the merchant.
What also makes me laugh is when cardholders cry my cards at risk when I use it on the web!
And to top it all the banks advertise when you use our card we 100% protect you from unauthorized transactions! LMAO ... The advert should read we make the merchants protect you from unauthorized transactions.
Banks love chargebacks because of the billion dollar chargeback fee industry I guess that is why they authorize orders I have seen which have said Mickey Mouse for a name and Teddy Bear Lane Toyland CT
Someone some where is taking the piss and the merchants are paying for it.
Banks! Don't tell me a card is good unless you are willing to take the loss if its not.
[edited by: ChargeBackDragon at 4:36 pm (utc) on Aug. 10, 2008]
We all understand chargebacks are part of the program the complaint really is the fact that the banks do nothing to protect the merchant when its the merchant creating the income for the banks.
When a shoplifter comes into a shop a shop keeper can catch and have a shoplifter prosecuted, when a chargeback occurs online even though an obvious crime is taking place and the merchant knows who ordered a theft will still take place blatantly and there is no one to make an arrest.
Its a bit like a shoplifter grabbing a bundle of clothes from a store running out the door getting caught and then telling the security or the police I never took anything and then being let go 'with' the clothes.
Merchants should be protectected from online theft and cardholders should be prosecuted for theft when its proved they ordered, at the moment its not even recognised as a crime when a cardholder is caught out, you cannot even get product or payment when a cardholder states it must have been someone in my house that ordered but it was not me.
HRoth off course it is worth taking credit cards but Merchants should still be protected from theft and there should be criminal recourse to deter cardholders into thinking maybe its not such a good idea, I could get busted and pay a large fine .
[edited by: ChargeBackDragon at 2:13 pm (utc) on Aug. 11, 2008]
Number 1 would be great I am sick of chargebacks where they say they tried everything possible to resolve with merchant when in fact they never contacted.
Nothing is going to change. The banks have bigger issues these days than to figure how to help online merchants.
Here is how to approach this problem. Add up all the money you lost on chargebacks last year (luckily for us its near zero). Figure out what percentage it was of your total sales. Then increase your prices by that percentage.
Problem solved.
If you check out Verify by Visa you will see it is possible to put chargebacks into extinction but passwording credit card shopping carts needs to be a standard feature.
Many people would say anything to get their money returned once they had decided to do so. Customers would just change the chargeback reason to being unsatisfied with the goods, not what I ordered or (my favorite) goods not received when promised.
Chargebackdragon hit the nail on the head.
My Gripe:
I've spent the last decade PRAYING for a class action lawsuit for the obscene amounts of money the cc processors have ripped everyone out of by charging higher rates to internet merchants, who in turn get NO BENEFIT for paying rates higher than a brick and morter.
I guarantee most B&Ms (in my industry and others) would kill for the low number of chargebacks we've had over the years.
....it's just another part of the 'scam'.
I've spent the last decade PRAYING for a class action lawsuit for the obscene amounts of money the cc processors have ripped everyone out of
As long as the banking/financial industry has a powerful lobby in congress, it never will happen. Don't bite the hand that feds you, I mean feeds you. My bad.
Marshall
She emailed something like, what I am supposed to do, give it to UPS or what?
We haven't heard anything further. No charge back (probably it will come today now that I posted!)
About a week later she was on the site looking at the returns page. Maybe we've discouraged her from the dark side of scamming.
We got a charge back end of August. We already had our reply prepared with details of emails, phone calls, pictures of products, etc.
We got an email from the customer last week that went on to basically say, Why are you charging me credit card again for this item I didn't buy?! Please send me a shipping label to send it back to you...
We later found out we won the charge back.
We choose not to write back the customer at all. Instead we stuck her IP in the .htaccess with a "deny from"
Credit card companies are not courts and their decisions are still subject to judicial review. A fact surprisingly many merchants seem to forget when they loose a chargeback and for some inexplicable reason believe that the credit card companies opinion in this matter is some sort of final divine decision.
Winning or loosing a chargeback means nothing in legal terms.
She might still go to court. And win, since it will be impossible for you to prove you shipped the right item.
If she is truly a fraudster, there is a 0% chance she will press matters further.
I agree with HugeNerd, I find it hard to believe someone trying to scam us would risk penalty for perjury in a court.
What we find fascinating is that she never called us on the telephone. She only wanted to communicate via email. My wife had to call her which I think startled her.
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Charge back thieves 'never' call they just say they did to their own credit card company, there is no logic to them calling the idea is they tell credit company they 'tried' to call but merchant ignored them.
I can quite safely say out of 100% of my charge backs 95% never called me but say they did. The other 5% called when they realized they were not getting a refund they would then contact credit card company and deny they had ever heard of me.
I still say that merchants should not hold the risk of charge backs, banks authorize and say cards are good and tell merchants go ahead send your product so there for the bank should take the risk that is what they are paid for... Did you know the merchant also loses the 3-5% that was charged to the merchant originally for the transaction as well as losing the product and the charge back fee.
The whole system is back to front.
If someone calls me and states they want a refund on a product instead of saying no or its not refundable just say ok no problem and fax or email them a simple form to fill in that simply asks for them to only fill the fields shown with their name address pre-fill a line for them that says ' I would like to request a refund of product that I purchased from your company on _____/_____/2008.
Pre fill that for them so they do not try and add some bull onto the form.
On the same form ask for them to sign and print their name and to please fax or email back along with a copy of the original credit card that was used, any refunds will only be returned to the card originally used.
I have been doing this for a while and I get just about all sending this form back, you can now deny the refund based on what ever your policy is, when the charge back comes through you now have solid proof they ordered from you and if they try and change reason from not knowing you to I hate the product etc your return policy will over rule that.
Also when I have had some charge backs from customers who pretend they never ordered I call up and state we can only reverse if you complete the form the majority fill it in some that have even said they lost the card but it amazingly appears on the form when returned to us.
