The Un-winnable Chargeback

A Cautionary Tale

[rjwmotor]

My experience with this recent chargeback just in time for the holiday season.

A business owner placed an order for their customer through my site. The items were promptly shipped with signature confirmation on delivery. About 3 weeks later I get a package in the mail. It was our products mashed into a little ball and shoved in a garbage bag and mailed back to us. It was completely destroyed and literally garbage at this point. I lauged at the note included that stated, "customer wanted red, not orange..we're returning these...sorry". Red was sent as that's what the "garbage" they sent us back was. I thought no way would they attempt, let alone win, a chargeback if they initiate it.

Absolutely no contact has ever been made with this customer and I saw no need to as there was nothing I was willing to do at this point(refund or replacement). About a week later, the chargeback comes through. I couldn't believe it. I sent my response along with paperwork,shipping info, etc... and was awarded the full amount. Case closed right? Wrong...

Got a new notice yesterday stating the customer is still disputing saying I have provided no proof of damage. I thought, easy enough, send pics of what they sent me back. Apparently that won't work. There's no proof that the garbage bag they sent me back was really what they sent.

As a last ditch effort, I'm sending the exact weight of the package I shipped(3 lbs) and a copy of their submitted shipping paperwork showing what they sent back weighed less than 1 lb. This is the only chance I have to win. What's worse is that the dispute department at my processing company said I should only ask for a percentage of my money back b/c there's no way I'll get it all back.

So there's where I stand today. I have return policies all over my site, I used signature confirmation, and I have what I thought was an easy win against a chargeback; but odds are I'm still going to lose some/all cash. Apparently, even when you do everything right; you can still lose a chargeback.

Any ideas on this one? The totals were about $170 and I'm offering to settle at half just so I get something. Still don't think it's right but what else can I do?

Sorry so long.....

[LifeinAsia]

First, what is your official return policy? That will dictate what you can or can not try at this point.

Depending on your policy, some possible options:
Since the customer is claiming the damage isn't their fault, then they need to take up the issue with the shipper. They DID buy insurance for it, right? If not, then that's THEIR risk. Also file paperwork with your processor saying that YOU are not responsible for damage while shipping, especially since YOU never authorized a return.

File a report with the police with jurisdiction for the customer (or the business owner- whoever owns the credit card).

Take the card holder to small claims court.

[Jack_Hughes]

As you sold through a reseller shouldn't they be the ones feeling the pain?

[LifeinAsia]

I think the key issue is whose credit card was charged (customer or business owner)?

We sometimes run into similar problems- travel agency uses us to make a reservation for their client. Their customer has no idea who we are or why we are charging their credit card, so issues an inquiry or chargeback (without even contacting us first).

Actually, I think only 1 time did we get a chargeback related to this issue. We contacted the travel agent- they apologized and sent a check to cover the chargeback fee.

[rjwmotor]

Lifeinasia:
Return policy is simple and stated CLEARLY on the site: NO RETURNS, NO REFUNDS without return authorization. The damage occurred when THEY tried installing it, NOT during shipment. They used it, destroyed it, returned it, and now want their money back claiming it was the wrong color. They're saying they returned it undamaged. Also, was the business owners card.

Jack:
Sold direct

[jecasc]

Any ideas on this one?

If you have accept the credit card company as final judge and executive authority for your claims you are lost.

Who is your contractual partner? It seems the business owner. So take them to small claims court. If your contractual partner is the customer at the shipping address then take them to small claims court. If you haven't done that before and do not know the procedure than see this as your opportunity to learn how it is done. Go to Amazon and get a book about small claims. Or to your local library. If you intend to stay in business there will be further opportunities to put this newly acquired knowledge into practice.

[rjwmotor]

The guys in Georgia...I'm in Ohio...not exactly worth the trip. I just can't believe that something as blatantly obvious could be ruled in his favor.

My point in all of this is that just b/c you're doing EVERYTHING right(retun policies,confirmations,etc..)according to card processing guidelines and the customer doesn't like your policies; you can still lose a chargeback.

This scumbag lied about contacting us, lied about us not working with him(which we would have done if contacted), and lied about sending product back undamaged. He said he did all of these things so it's his word against ours. In cases like this the banks ALWAYS side with the customer.

[dpd1]

It's unfair, but I think what's more important about things like this, is your mental health. Yes, the money is important, but your frame of mind is much more important. If you are distracted by stuff like this, it can actually hinder you more than the initial damage of the incident.

One time when I was working in construction, my boss had a brand new work truck. Second day on the job, an idiot hit it with a back-hoe. I thought he was going to go ballistic. He looked at it... Shook his head, then just walked away. I asked him what he was going to do... He just said: "Nothing... Nature of the business. If I lost it every time something went wrong, I'd be nuts by now". I learned a lot by that. In most businesses, you are always going to have something that you don't like. I've had things that drove me nuts, but I just tried to remember it's a small fraction, and wrote it off. Just the nature of business.

[rjwmotor]

I completely agree with you dpd1....it's just irritating...time to move on...

[trinorthlighting]

We refuse delivery of any returns without an rma number issued and on the package. That way they can not prove they sent it back to you in the first place if it is not authorized.

[jecasc]

The guys in Georgia...I'm in Ohio...not exactly worth the trip. I just can't believe that something as blatantly obvious could be ruled in his favor.

Are you sure you have to appear personally? Where I live I file my small claims online by filling out a form, the debtor gets a court order, and when he doesn't file an objection within 4 weeks it's valid and I can enforce it. Takes about five minutes. Only if he files an objection it goes to court. Which happened only once in more than 50 cases and even then the case was settled completly in writing. I don't live in the US - but I know the procedure is similar in many countries - for example in the UK. So I would at least check if there even will be a hearing before throwing out the money.

[rjwmotor]

We refuse delivery of any returns without an rma number issued and on the package. That way they can not prove they sent it back to you in the first place if it is not authorized.

This only works for Visa..If it's a mastercard the customer doesn't even have to prove they sent it back. If they say they did that's all they need.

Also, if the customer doesn't get an RMA and simply sends it back they can still issue a chargeback stating "item not as described". This is what the problem is now. This customer is lying and saying that he contacted me and I would not issue an RMA. He then proceeded to send it back anyway and issue a chargeback.

As far as refusing delivery, if the mailman drops it off with delivery confirmation(not signature); it's delivered. Unless you stand there and go through your mail as it's being dropped off it's considered delivered regardless if you open it.