New Olympic Sport...The Chargeback!!!

ANMMark · Post #1 (**permalink**) 06-11-2006, 11:36 PM

Okay, it's been a while since I started a thread, complaining about the man, but hey...what can I say, it's long over due.

I have to say, that credit card companies have allowed people to turn the process of a chargeback, into nothing more than a sport, with the objective of seeing who wins. The one who wins the money, wins the game.

Consumers are filing chargebacks now, if they pass gas and no one notices.

What's worse is, credit card companies support this practice by excusing them with a "Internet merchants must simply accept chargebacks as part of their business" while a brick and mortar company has more ground to stand on.

It's appalling that credit cards want merchants to accept their cards at POS, but yet treat the merchants in a way, that the merchants might as well simply give their merchandise away.

In our industry, I blame the hosts. On numerous threads, on multiple websites, you'll find hosts so desperate for business, that as soon as they notice an unhappy customer they jump on them like a tank of sharks, trying to bring them over to their company. Usually the first suggestion is....you guessed it...."do a chargeback"

So when will we see this as an Olympic sport? If things keep going this way...I'm sure we'll see it soon.

Zachary McClung · Post #2 (**permalink**) 06-12-2006, 07:27 AM

Mark,

Have you been having issues with Charge Backs lately? Or, did you see something in a forum to bring this up?

As much as I agree with your statement the credit card companies must give priority to brick and mortar because of the fact that they can verify drivers license, signature, and other items to make sure that this is not a fraudelent transaction.

What do we do? Oh, that is right fraudgate, fraudgaurdian, or maxmind. What do these do for you? Wait nothing! Well maybe fraudgate because it is voice verified and you can better support yourself; however, you still do not have that card.

The thing that gets me is no matter whether I fight a chareback or not they still charge me $20.00. And, mine use to be $35.00 until I compalined enough. Think about it $35.00 for a $3.95. There is something wrong there.

Personally, I do not think that this is going to change; however, we might be able to come up with better ways to kill hosting companies who suggest that.

ANMMark · Post #3 (**permalink**) 06-12-2006, 08:40 AM

Well, we have had a fw instances lately.

However, these are not fraud orders. In fact, when there is fraud involved, I do not mind a chargeback actually.

I'm talking about people who do chargebacks for no good reason.

Like....."{stomp}{stomp}, if I don't get my way, I'll file a chargeback"

Or...."You have a new service, and it wasn't there when I first ordered. If I don't get it for free, I'll do a chargeback on my whole order."

ldcdc · Post #4 (**permalink**) 06-12-2006, 09:09 AM

I've always considered that internet providers were disadvantaged because of the current chargeback procedure. As far as I can see, the more customers know about it, the more they take advantage of it. Chargebacks become almost like a new way to get refunds whenever you feel like it. Heck, why ask for a refund? Just do a chargeback!

GnomeyNewt · Post #5 (**permalink**) 06-12-2006, 02:46 PM

I agree with what everyone has posted. It is a scarey trend lately that "chargeback" is even mentioned before "did you contact them". Honestly, I can't remember the last time I did a chargeback. That is the last way that I want to handle any issue with any provider online or offline.

A lot of what I see is people are paying 1-2 years in advance and when they want to leave their provider, they ask for all of their money back even for months used. Of course no host would agree and than, you guessed it a chargeback.

I don't know if there is a limit on how long a person can place a chargeback?

Colorteck · Post #6 (**permalink**) 07-22-2006, 02:14 PM

Quote:

Originally Posted by ANMMark

Well, we have had a fw instances lately.

However, these are not fraud orders. In fact, when there is fraud involved, I do not mind a chargeback actually.

I'm talking about people who do chargebacks for no good reason.

Like....."{stomp}{stomp}, if I don't get my way, I'll file a chargeback"

Or...."You have a new service, and it wasn't there when I first ordered. If I don't get it for free, I'll do a chargeback on my whole order."

I think a change should happen soon. People know they can do this so they will do it. I hate when someone uses our service for threee months then all of a sudden they just do not need a site any longer. They then do a chargeback for the three months of web hosting.

You can fight back by letting them know you will turn it over to collections and this will hurt their credit. Most do not want a charge against their credit score for a low amount of money. But you are still out the chargeback fee.

webfreak08 · Post #7 (**permalink**) 07-22-2006, 02:29 PM

What about have something like Micfo's policy regarding chargebacks?

Quote:

Originally Posted by Micfo TOS

5. Charge Backs: Micfo.com does not allow charge backs to occur to its merchant accounts and contracts with VISA/ MASTERCARD International, American Express and its Discover Financial services. It is not recommended to initiate a charge back hence customer agreed to AUP (this document) and the terms and conditions as outlined in this document and Micfo.com will use this document and customers agreement at the time of the order to wholeheartedly fight a charge back and/ dispute. If the customer has supplied a valid reason for a refund, Micfo.com will gladly apply this refund ONLY if the requirements specified above are met. Any dispute/ charge back attempts will immediately result in suspension of the web hosting account and another charge will be applied the customers credit card under the same order/ authorization number. Any customer, who provides a credit card charge back in response to a bill and/or order placed at Micfo.com, will be subject to collections and legal action. Charge backs are never an acceptable means of attaining a refund. By ordering an account you are bound by these terms and conditions and must follow and agree to them. The following amounts will be applied for all charge backs: $25.00 Charge back processing fee, $100 penalty for charge back usage. In addition if collections action is required a 22% collections fee will be assessed as well for the total amount.

FYI, HD's hosted by Micfo.

ldcdc · Post #8 (**permalink**) 07-22-2006, 09:59 PM

Quote:

Charge backs are never an acceptable means of attaining a refund.

Even if the company fails to provide a full refund when a full refund is due?

Quote:

Micfo.com does not allow charge backs to occur to its merchant accounts and contracts with VISA/ MASTERCARD International, American Express and its Discover Financial services.

Hmm.. wouldn't Micfo actually have agreed to accept the possibility of chargebacks in order to be able to charge VISA (etc) cards in the first palce?

This makes me remind that just because some things are part of a TOS, they're not necessarily enforceable in a court of law.

Quote:

Any dispute/ charge back attempts will immediately result in suspension of the web hosting account and another charge will be applied the customers credit card under the same order/ authorization number.

That sounds highly unproductive to me. The customer could then do another chargeback and have the bank refuse any further changes from the merchant.

Quote:

The following amounts will be applied for all charge backs: $25.00 Charge back processing fee, $100 penalty for charge back usage.

In the end, I wonder what VISA would feel about this whole clause being part of a merchant's TOS.

webfreak08 · Post #9 (**permalink**) 07-23-2006, 07:25 AM

Quote:

Originally Posted by ldcdc

Hmm.. wouldn't Micfo actually have agreed to accept the possibility of chargebacks in order to be able to charge VISA (etc) cards in the first palce?

This makes me remind that just because some things are part of a TOS, they're not necessarily enforceable in a court of law.

They obviously do "allow" chargebacks, seeing what they'll do in case if one occurs. I think better phrasing would be, "Micfo.com will not tolerate chargebacks".

Artashes · Post #10 (**permalink**) 07-23-2006, 11:34 AM

Micfo does of course process chargebacks if the reason is good enough: within their money-back guarantee time, or if technical difficulties occur. They will not refund if client decides he doesn't want to run a web site anymore in the middle of the contract, so he files for chargeback. If the client agreed to contract, he will be held responsible for it, just like anyone else will. I would however study anyone's TOS before agreeing to anything.

Best,

ldcdc · Post #11 (**permalink**) 07-23-2006, 08:09 PM

Maybe it's just me getting confused here, but I think we shouldn't use "chargeback" and "refund" interchangeably.

Quote:

If the client agreed to contract, he will be held responsible for it, just like anyone else will.

True, but only as long as the clause in itself is enforceable.

Chargebacks were implemented as a solution to a serious problem (consumer protection) and they are fundamental for the way in which VISA and other such companies operate in this day and age when online transactions are commonplace. I just don't see them condoning such clauses in the terms of merchants.

http://www.ftc.gov/bcp/icpw/comments/visa.htm is a nice read here and there.

From http://usa.visa.com/download/busines..._merchants.pdf :