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  1. #1
    Affiliate Manager frankodelic's Avatar
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    Hello All,

    I'm hoping someone can point me in the direction of some good information on this subject.

    We had a guy purchase one of our scooters. Two months later he got a flat tire. He claimed it was due to a product defect rather than abuse, however the manufacturer's warranty doesn't cover the replacement of tires. So, instead of buying a replacement tire this guy charges back his credit card and wins back the full amount of his purchase!

    WHAT THE ???

    Mind you he still has the scooter in his possession.

    We're told we have to have paperwork with his signature on it verifying he understands the warranty to win the case. Same applies to our return policies.

    We've sold thousands of scooters and this sort of thing has only happened a couple of times, but nonetheless it's infuriating.

    What can we do so that the policies we set at the time of purchase are enforceable? Our merchant account is no help to us on this one. All suggestions are welcome.

    Frank
    UrbanScooters.com
    UrbanScooters.com Affiliate Program

  2. #2
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    I'm not sure, but couldn't you add a step in your buying process where there is a link to the terms and conditions of sale. The purchaser would then have to check a box saying that he/she has read, understands and agrees to these terms before they hand over their credit card details.

    The signature bit is difficult. Could you not put something in these terms and conditions that says when the customer signs for the product when he receives it, this signature is taken as further agreement to the warranty and returns policies.

    Don't know how enforceable this is in law, cos I ain't a lawyer, but it might work.

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  3. #3
    Affiliate Manager frankodelic's Avatar
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    Yeah... having the customer check a box at check out doesn't do the trick. I've tried that.

    I'll check with FedEx and UPS to see if they offerer a service where they have the customer initial our policies. I imagine this would be expensive if it's something that's offered, but a good idea.

    Thanks Mr. Wahlburg!

    Frank
    UrbanScooters.com
    UrbanScooters.com Affiliate Program

  4. #4
    Defender of Truth, Justice and the Affiliate Way
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    You could be SOL on this one Frank. V/MC definitely aren't merchant centric. Maybe it's why I've received 2 or 3 notices of class actions against V/MC in the last month.

    First, have you filed your appeal yet for this particular chargeback? 99% of the time, when a customer files a chargeback the merchant bank will refund to the customer NO MATTER what. The only times I've seen them not refund the charge, is when it's been the customer just saying they didn't recognize the charge. I don't get many chargebacks, but of the ones I've gotten, I have won every appeal and gotten my money back. Well the purchase price. Of course V/MC still keep their $20-$30 chargeback fee.

    What my merchant bank recommends in minimizing chargebacks related to returns, etc and to increase your chance on appeal is that your return policy needs to easily accessible on your site, it should be visible during the order process, if you allow mail in orders it should be on the order form, and it should be on the invoice they receive. If you've put the information within reasonable access prior to their purchase, then you should win the chargeback on appeal if it does not fall within your return policy.

    I would think a similiar situation would hold true for the warranties. I glanced at some of your site and see some discrepancies between your return policy and your warranty policy. Hard to say for this particular situation since I didn't say which product was purchased and there is variation between the products as far as warranty. It may be you just need to tighten up your policies a bit more and ferret out some inconsistencies.

    Regardless, in this situation a chargeback should not have been issued since the customer still has the product. Although, V/MC are known for doing this, especially when the customer claims someone not authorized used their card (ie bf/gf, spouse, etc). In those cases the merchant just gets screwed. They are out the $$$ and the product.

    You may be able to win back on appeal if you have not filed that yet (but there is a very small timeframe to file appeal) based on what communications you may have documented from the customer regarding this issue and the fact he still has the product.

    PM me if you want some input on some of the termiologay you have up on the site right now that could potentially cause you some problems in the future. Don't want to bore the board too much.

    It's Your Money. You earned it. What are you going to do to make sure you get to keep it?

  5. #5
    Defender of Truth, Justice and the Affiliate Way
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    This also brings up a very good point. It's not always a fraudulent merchant when affs see a reversal well after a sell. It's absolutely amazing what some customers will try to pull with this chargeback thing. Customers can be real stinkers many times.

    It's Your Money. You earned it. What are you going to do to make sure you get to keep it?

  6. #6
    Affiliate Manager frankodelic's Avatar
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    Thanks BLFH! I would certainly be interested in any input you have.

    I just got off the phone with both UPS and FedEx and neither one offers a service where the delivery person will have the customer initial a box confirming they understand our policies.

    PM on it's way!!! Thanks!

    Frank
    UrbanScooters.com
    UrbanScooters.com Affiliate Program

  7. #7
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    Ms. B hit the nail on the head. V/Mc don't care. They will refund because it doesn't matter to them. They take the purchase price from the merchant's account plus the charge back fee. V/Mc aren't out any money in fact they have made some so they don't have an incentive not to refund the customer's money.

    There are two other things you can do to protect yourself but neither is ideal. You can either have the customers fax in a signed order form (which isn't convenient and will result in loss of sales) or you can voice verify all orders and record the customer answers.

    Basically you can call them up and say as a service to your customers you are just verifying with them for security purposes that they ordered such and such scooter for $X. And ask if they authorize you to charge their card and agree to your terms and conditions. The file is a wav file or similar recording. If there is a problem later, then you tell V/Mc that they have voice verified the order, send them the file of the people authorizing the charge and you will win.

    Those are the only two options I'm aware that will almost always result in a win for the internet merchant.

    The question is whether the costs of implementing one of these options is worth the result.

    Kip

  8. #8
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    This always has been a pitfall for merchants accepting CC's. The world is full of sleezy underhanded consumers with credit cards in their hands. Sometimes the card actually belongs to them. Blame the liberal consumer advocates for the results. Merchants take it in the shorts for any chargeback requests from CC sales.

    CC holders and the CC companies lose nothing on return request, stolen cards or cancelled orders ....the merchant always takes a bath.

    Mike & Charlie ...

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  9. #9
    Defender of Truth, Justice and the Affiliate Way
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> the merchant always takes a bath.
    <HR></BLOCKQUOTE>

    Exactly! It will be interesting to see if some of the responsiblity is shifted to the CC companies for at least providing an accurate system for the merchant to assess whether or not a charge should be approved. If AVS gives back a positive response but the card is really stolen and has been stolen or the parameters don't really match, then why is it the merchant's fault???

    Not only do the CC companies not lose, but they actually profit off of the chargeback fee assessed to the merchant.

    It's Your Money. You earned it. What are you going to do to make sure you get to keep it?

  10. #10
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    Does your terms or service or purchase agreement state the court venue? If not it should - then sue them. They have comitted theft. While it is useless, I would demand the return of mechandise. If they refuse, take them to court.

    Chet

  11. #11
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    Great Information BLFH, and you've hit it on the head. Additionally, Chet makes a great point. I wouldn't hesitate taking them to court over it, particularly when you are talking about the value of the scooter. It would make it worthwhile to do so. I've had to do it in the past, and it isn't much to go down to the courthouse to get the process started. Even then, should you win, it can be difficult to collect but then you have the law on your side.

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  12. #12
    ABW Ambassador JJJay's Avatar
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    I agree, you should take it to the small claims court, since you have the credit card and delivery details, and I'm sure this guy signed the package.

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