I'm new to this forum. I found it while researching chargeback fees. I had my first chargeback today, for a duplicate charge, which I actually refunded 10 days ago. The money didn't get placed back into her account fast enough for her. I told her it would take 4 business days and she only waited 4 days to call her bank to dispute the charge. Quite nice of her. Needless to say, even though I corrected the problem asap when the customer called ME about it, I was left to the whim of the customer and my merchant e-solutions and I'll be out atleast the chargeback fee when it's all said and done. To top it all off, she was given a refund by her bank at this point too, so now I have to try to get MY money back!

My point in starting this post is that I think this is HIGHLY unjust. Why are we left holding the bag when we can prove that we are in the right on a dispute? That charge that the bank charges the merchant account, which is ultimately passed on to us, is bogus! If the chargeback is our fault, then, fine, we should pay it, but if it's the customer's fault, THEY SHOULD PAY IT. I want to see a FEDERAL LAW that says this. What it would come down to is that their issuing bank would just not get a fee for the chargeback because it's highly unlikely that in the overly competitive credit card world, they would pass that fee on to their customer. They haven't a care in the world about passing it down to us.

I am dead serious that we need a federal law to deal with this. This is legal theft and it needs to be ILLEGAL. Does anyone have any ideas they would like to contribute towards this topic? One of my senators is a former small business owner and a strong proponent of small businesses - Sen. Mike Enzi of Wyoming. I am going to do a little more research, then I'm going to contact him about this and see if I can twist his arm into developing a bill that would deal with this problem.

ALL OF YOU need to contact your congressmen and congresswomen and demand that they do something about this. Lets stop complaining about it and take some action.

April
Gift Baskets for Men
Gift Baskets

Hi April,

Sorry to hear about that incident. I will just speak from my experience: in about 6 years we have been very lucky with chargebacks (just 3), and they all were legitimate purchases forgotten by the customers. Once I charged someone two times.

Chargebacks: We followed the right steps, I know that the fees can be a pain, but I would advise to DOCUMENT EVERYTHING on paper (emails, orders, tracking numbers, phone order slip, etc) or in any way, because it will come handy at the right time. Matter of fact we had a small chargeback last week for just 30 bucks, the lady forgot she made the purchase and before contacting us FIRST she charged it back (this is an unknown harm done by the customers to the merchants - they are all clueless until the paperwork comes in and the phonecalls happen, to the point that they admit to feel bothered by it and they say that it would have been better to just call us first... gee.. no kidding...).

Charged Twice: Luckily I noticed at the end of the day that I double charged this person, so IMMEDIATELY, I wrote an email to her (good for proof) letting her know that I double charged her and I also proceeded to refund her money RIGHT AWAY.

Immediate action is the best advise I could give to you or anyone. At the end the only one that really benefits from chargebacks, ID theft and other activities alike are the CC Companies.

Scooter

Hi April, You are right, we do need some measure of protection against purchaser fraud. Do you have anything in mind as to where we should begin?

An ounce of prevention:

Have your 800 included on the customer’s statement. It cost nothing and will prompt the customer to call you first because your # is the handiest # and it is a free call.

Every couple of months we will get a call from a cardholder questioning a charge. Without fail we have been able to answer their questions and save the cost and hassle of dealing with the CC processor, the associated account demerits and or fees.

Best, Joe

Because of chargeback issues/bad service we switched to a different merchant processor that was recommended by another MC merchant. It has been almost a year and they seem to be a lot more merchant friendly. Like any service provider, if you do not like the treatment - LEAVE.

This is a situation where there are two sides to the issue.

<cingular rant>

I ordered a prepaid phone on a prepaid debit card.
I keep the card for internet purchases - no one can steal what I don't put on the card.
Seemed to make sense at the time...
I changed my mind before the phone arrived and went with a post-paid famshare account instead.
When the phone arrived, I refused shipment and noted the tracking number for the return.
30 days after I received confirmation of the carrier's receipt of the return, I contacted them about crediting the card back.
To cut to the chase, I have now passed the 1 year anniversary of this return with no credit ever forthcoming.
I don't expect any. I never really expected them to react responsibly, but to my dismay I discovered I had zero protection against merchant fraud. With the prepaid card, anyone with a merchant account can rape it and there is no chargeback option - at least with this card issuer.

</cingular rant>

Because people remember vividly every time they get screwed, there is naturally a temptation to screw the other guy first if there is any doubt.

Other posters have pointed out that the best defense is to take whatever steps appropriate to remove that doubt, but it will still happen eventually.

Is legislation the answer? I dunno. You have to figure that creating a statutory process requires that process be funded. You would need people to administer the program, do dispute resolution, etc. Who pays? I'm betting it would never be the card issuer. More likely, you would see their existing costs for dispute resolution be offloaded to the losing party.

Would the cost per dollar of revenue be greater or less than the cost per dollar of revenue under the existing system?