Chargeback for merchandise received were not as described

[derekwong28]

We have just received a notification of chargeback investigation for "merchandise received were not as described"

This order was sent off to the recipient on 20th May 2003, and was received by the recipient on 28th May 2003

The recipient NEVER contacted us about any problems with this product. We have a clearly stated return/refund policy: he could have returned the product to us within 7 days and we would have refunded him. Morover, if there were any problems after the 7 day period, he could have returned to us for repair under warranty.

We consider this to be a ridiculous and spurious claim. Does he expect to receive goods for free? Is he attempting to carry out "legitimate credit card fraud" We have never had anything like this in 2 years.

Can someone tell me whether they have experience of this and how to proceed?

[rogerd]

Document the shipment as well as your published return / problem resolution policy to your credit card company. Note that you have not been contacted by the customer. Also note that you have not received any merchandise from the customer, and that the customer still has your product.

You might try contacting the customer to find out what the problem is and seeing if you can resolve it.

You CAN win these if you document everything well. Unfortunately, there is a presumption that the customer is always right, so you will probably have the money deducted while you argue it out. Even then, you still might lose if the customer can convince them he's right.

[urameatball]

That's so wrong.
customers can't just make up their own rules!

[marcs]

Does he expect to receive goods for free? Is he attempting to carry out "legitimate credit card fraud"

Sure sounds like it. There are those out there who don't think they should have to pay for anything in life.

You can fight chargebacks and we usually win and have the chargeback reseversed. Reply with a copy of your return policy and an offer to exchange the item if desired (even after your policy allows for it). That may reverse the chargeback.

[hot_tubs]

Welcome to the world of mail order business :-)! Yes, some people think they can get something for free. Charge backs are simply a "cost of doing business", but many, if not most, can be won by YOU.

However, this should be an easy chargeback to beat. If the customer is in posession of the product the credit card company (bank) shouldn't refund the money. Provide them with a copy of the delivery notice (UPS can provide this) and explain that the item is in their posession and if they would like to return it in it's original condition you'll be happy to give a refund. As long as they posess the item, they're obligated to pay for it! If they return it to you, almost certainly the credit card company will refund their money regardless of the circumstances (unless it's used or damaged).

I would begin the response by stating that the item in question was accepted by the customer over 2 months ago and is still in their posession. Offer to take the item back if they'll return it as per you "policy" (with a time extension of course)....... this makes you look "good"

(these are the important facts you don't want overlooked by whomever is assigne to this chargeback. Anything that follows is less relevant and is more for your info.)

next I would include the description of the item "in question" and ask how it was improperly described.

next would be a opy of your return policy along with stating how many DAYS this customer has had this item in their posession (days being a bigger number than weeks or months seems to work better for us).

You might also look up, and include a copy of your processing contract as there's usually some time frame allowed to file a chargeback.

good luck! maybe if you think of it as a challange it might be fun? naaaaaaaaaaaa, but my bookeeper likes beating the chargebacks.

[Webwork]

Free (generic, I'm not really practicing law in your jurisdiction AND, of course, I advise you to consult with competent local counsel) advice......1) Document everything; 2) Send copies to CC company; 3) In cover letter itemize, by "Exhibit #", each attachment, explaining the importance of each. Also, make reference to any relevant passages of the chargeback/complaint policy and procedures; 4) Send it all in by regular and certified mail to the CC company and say so in the body of the letter; 5) Do a separate letter to the CEO of the CC company advising of your concern that there needs to be clear guidelines disseminated to the personnel responsible for investigating charge backs that the MUST first confirm that the product was returned with proof of return.

I could imagine a fraud where the aggrieved says "Well, I most certainly returned product X", when, in fact, they are lying and kept the product. I would think that the CC would have to have a policy that favors merchants in such situations. Otherwise, fraud would be WAY too easy. Just buy a big ticket item and send back an empty box with no return address.

As I venture into the realm of ecommerce the old legal noodle is looking at in inequities of the system, all the while thinking "class action?". I think the entire chargeback system is stacked in favor of the CC and one day will be closely examined in class action litigation.

The beauty of the much maligned "class action lawsuit" is that it is at it's best when a large company is trying to screw many people out of a small amount of money (each), resulting in a large profit or gain to the company. Wehn it comes to leveling the playing field this works both ways: The lawyers, who couldn't afford to handle one case, say for $7.50, can handle 1,000,000 cases as a class action.

The sad part is that, due to the volume of mailings, paperwork, etc., the legal costs often eat up a considerable portion of the recovery. BUT, I leave you with this: If there is no surviving means of redress, i.e., if class action litigation is outlawed, then will you find yourself increasingly being squeezed and screwed, by more and more companies, for those "little sums" that add up to large profits?

What do you think?

[derekwong28]

Thanks for your suggestions. We are going to prepare a defense as suggested. Although the amount involved is small and it is covered by insurance anyway, we intend to fight this as a matter of principal. Surely, this person has done it to other merchants before.

[Macro]

derekwong, as stated before the presumption is usually in the customer's favour. Read through the terms of your agreement with the bank/processor and you'll see how well it's stacked against you.

Hopefully one day there'll be a class action against this but in the interim it looks like "merchant service providers" will continue to screw merchants as they are the easier targets.

Don't fall for the canned letters they send saying things like: "We do our best to protect the interests of our merchants and will attempt to defend this chargeback on your behalf". Nobody sitting at the Merchant Service Provider actually looked at the case and thought Derekwong seems like a nice guy and has a good trading history, this is probably a crook trying to weasel him out of some money. No, they didn't. They took a letter off off the shelf, put your address on it and sent it off to you.

All the very best of luck in defending this chargeback. It is possible if you are determined, informed and tackle the defence methodically.

[chuladi]

Visa publishes a chargeback management guide for merchants. It's free, it shows all the different chargebacks and the only valid defenses. You can get it by calling:

1-800-VISA-311

and asking for item number VBS050102

I don't have mine handy, but I believe one of the few defenses you have is that the customer must first make a reasonable attempt to return the merchandise.