Credit Card Procedures - Long

[Duane <drcollie@xxxxxxxxxxxxxxx>]

Andy writes in part:

> They, in turn, will not give the
>merchant his money until he performs his end of
>the deal(this is a called a "chargeback" -- the
>disputed charge is debited from the merchant's
>visa/mc account from which he received periodic
>payments for charges at his business). Your card
>company will probably hassle the merchant to give
>you your stuff (so the card issuer in turn will
>have the right to collect the charges from you). I
>had a similar experience with ordering off the net

Andy, 

You are mostly right here, with a few minor corrections. As a mail order
retailer, I've been  dealing with this stuff day in and day out for over 20
years. Here's how it works:

When the mechant processes your card, that money is transmitted in a
terminal poll at midnight to the card processor and will show up in the
merchants bank account within 48 hours (on average). By bankcard
regulation, the merchant MUST NOT debit your card until the goods are ready
to ship. They allow a 48 to 72 hour grace period, but beyond that the
merchant is in violation if he does not ship in a timely manner. If your
card gets whacked way before you got  the goods (or didn't get them at all)
you've got the retailer dead to rights. 

When you make a WRITTEN complaint on an amount in dispute off your card
statement, the card issuer sends the merchant a form letter to produce
copies of the invoice and proof of shipment within 'x' number of days (this
is also one reason why very few mail order companies will ship via the US
Post Office - they want a signed receipt that you got the goods).  If the
merchant fails to send the documents requested, your card issuer process
the chargeback and it automatically comes out of the merchant's account.
They never call a merchant and pressure them to ship anything.  It's a set
procedure accomplished via forms. 

If the merchant can demonstrate that the goods were delivered, then there
is no chargeback.  This is a major hassle for the merchant, so most
retailers will go out of their way to not have to deal with chargebacks.

Note that some card issuers like USAA and CITIBANC are very much consumer
oriented while others like FIRST CARD are less so.  In a grey area, they
are more likely to go to bat for you.

Some other credit card facts and figures for general usage as a lot of this
stuff is confusing.

Visa and Mastercard are much less expensive for the merchant to process
than American Express.  Best available rate on AM EX is currently 2.95% of
the bill.  Mastercard/Visa is typically 1.3 to 1.8 % of the bill for volume
users.  So what does this mean?  Be a nice guy and give your favorite
merchant your Visa/MC. It saves him money and will come back to you in the
form of lower retail prices. Believe me, this percentage affects the
overall gross and determines margin points.  Better yet, pay in cash/check
and save your retailer some money. That's why when I order from my
'regulars' like Turner Motorsports or Steve D'G I always pay by check.

It's against the contract agreements to discount for cash/check in lieu of
taking the credit cards - so don't be surprised if the merchant declines to
give you a break for cash - he can lose his merchant card privledges.

When you RETURN an item and complain about re-stocking charges, keep in
mind that the merchant does not recover the credit card processing fee.
So, as an example, if you buy $ 2,000 worth of wheels, etc. and he is
paying a 1.8 % discount fee, when you bring them back he is in the hole $
36.00 on the deal if he refunds you all your money. This leaves a real bad
taste in the mouth of the merchant as he not only has a cash loss on the
deal, but probably lost an hour of work on your order and has to deal with
ripped packaging and the like...hence the re-stock charges you often see. 

Again, if you think you may return it, pay by cash/check and ask them to
waive the re-stocking charge if you request a refund .. sometimes it works.

Where you have some protection: 

Anytime the merchant has your card in hand and swipes it through a reader -
you have virtually no recourse against the merchant as he has electronic
proof you gave him the card with the magnetic swipe.  If he has only a
verbal number given to him over the phone and has to hand key the
transaction, then YOU can deny with some plausibility that you never gave
the merchant your card number. Your card issuer will back you and issue a
chargeback provided you did not keep the goods. For that same reason,
always return goods via UPS, Fed-X, etc. so there is a record of the
shipment being received back at the merchant.

Don't expect your credit card company to run interference for you if you
made a bad business deal or the product received was less than
satisfactory. They generally will not do this. 

Some real world examples:

You book a hotel over the phone for guaranteed reservations - 6 p.m.
arrival. For one reason or another you don't show and the hotel whacks your
credit card.  Here's where you can get a chargeback easily as the hotel
never was in possession of your card for a swipe and you never received the
services/goods for the charge.  Simply deny you ever made the reservation
and the charge will come off. Everytime. This is nothing more than an
attempt by the hotels to keep you honest.

You buy some "super-pressure cast" wheels on a no-return closeout from Hott
Rodd and when they arrive you don't like them as they are plain ole cast
wheels and nothing special. H.R won't take them back saying they were a
clearance item. Your credit card company will NOT chargeback on this as you
simply made a bad deal, but did receive the wheels. They don't care if the
wheels are mis-represented, that's an issue for the court.

<Super Secret Tip...shhhhhhhh!!>  Get to be good buddies with your regular
UPS driver. Then, when something comes in that 'may' be questionable, ask
him to stand by while you check out the goods BEFORE you sign off the
package.  This is a real good time to get him a Coke and some Oreos.
Carefully open the package, check out the goods, and if they look like a
scam/sham, re-tape the box and hand it back to him without signing for
it...DELIVERY REFUSED.  Now you have rights of chargeback.  Note that the
UPS drivers are not supposed to allow you to do this.....but its amazing
how far a coke and cookies can get you.

<...burp....> and ya'll thought I was only good fer drinking beer and
tellin' tall stories.

Duane Collie
SVR/UUC/RM3DR1
National Capital Chapter

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