posted on September 4, 2001 09:00:46 PM new
Can I state in my auctions and in the transaction details email a series of conditions that is legally binding?
Example:
- If you do not take Registerd Mail that will confirm delivery you waive the right for a charge back based on non-delivery
posted on September 4, 2001 09:19:44 PM new
I've seen several auctions that state "credit card purchases will only be shipped to the confirmed billing address"
If that's the only place you'll ship to then there should be little room for argument in those cases.
Personally I think you should deal on a case by case basis. I don't understand a seller that demands to ship only to a confirmed billing address when the item costs $20 and the buyer has positive feedback in the hundreds but such sellers exist.
posted on September 5, 2001 07:24:45 AM new
>>Can I state in my auctions and in the transaction details email a series of conditions that is legally binding?
Example:
- If you do not take Registerd Mail that will confirm delivery you waive the right for a charge back based on non-delivery <<
Are you accepting credit cards directly or going through a payment service? If you go through a payment service, your terms are meaningless. In the event of a charge back, the buyer will contact his credit card. His card will contact the service. In most cases, you will be out of the loop entirely.
If you accept the card directly, then you can make terms but they must be legal and reasonable. You can not legally state "buyer has no right to charge back." Buyer always has the right to charge back. The decision whether to accept or deny it rests with the credit card company. If you had your terms clearly stated on your site and on the customer's receipt and they were legal and reasonable, the CC company often lets them stand.
YOU are always on the hook for proof of delivery and to the correct address. If you shipped without this or if you shipped to a different address than the credit card, YOU are stuck. It doesn't make a difference what your terms said or what the customer asked.
Where you can cover yourself with terms is in a return policy. You can state "Defective returns allowed within ten days of purchase. Authorization for return is required. If item is not defective, a 15% restocking fee is charged.." and similar language. You will not get away with "all sales final." Your terms have to be reasonable, legal and give the customer some recourse if the item is not what was described. Look at the sales terms of some of the bigger sites like Buy.com, egghead, etc for some ideas.
Again, in CC transactions there are no guarantees. Therefore you have to understand and accept the risk for any deal you agree to. I will not accept CC in any form if the customer wants it shipped with no tracking or insurance. I will not accept direct CC or payment service if customer wants it shipped to a different address than the credit card (with the exception of C2it which does not provide an address). No matter what good excuse the customer has (and there are legitimate reasons) it should be their risk and not yours. So insist on a non CC payment. They can pay from paypal funds, achex and others.
posted on September 5, 2001 09:24:50 AM newI will not accept direct CC or payment service if customer wants it shipped to a different address than the credit card
Good thing you aren't a florist. I'm going to require shipping to a billing address on a $500 item, but on a $20 item... I guess I live dangerously by your thinking.
posted on September 5, 2001 09:46:19 AM new
>>I will not accept direct CC or payment service if customer wants it shipped to a different address than the credit card
Good thing you aren't a florist. I'm going to require shipping to a billing address on a $500 item, but on a $20 item... I guess I live dangerously by your thinking.<<
You're right, I'm not a florist. And I do sell a lot of high ticket items. And with the higher fees being charged by the payment services, sellers may be giving up the lion's share of the profits accepting them on low ticket items. As for returns and charge backs, I can just imagine someone buying his girlfriend flowers using paypal and returning them after they died with a "quality of merchandise" complaint. Are there really that many florists selling on the net and accepting paypal credit cards?
posted on September 5, 2001 09:48:08 AM new- If you do not take Registerd Mail that will confirm delivery you waive the right for a charge back based on non-delivery
The right to a chargeback which meets the conditions specified by law cannot be waived.
As a practical matter, credit card companies have expanded these rights, to a defacto set which is greater than specified by law. The defacto rights cannot be waived either.
Even more generally, beyond cards, the "waiving" of normally held rights requires both active agreement as well as evidence that the party agreeing to such a waiver is qualified to enter such an agreement. Consumers cannot generally waive very many rights, businesses can.
Any business plan which relies on buyers waiving rights is fundamentally flawed.
posted on September 5, 2001 10:47:41 AM newAre there really that many florists selling on the net and accepting paypal credit cards?
Actually I found a very large list (couple hundred) of florist that accept PayPal (surprised me too.) Your statement however wasn't limited to PayPal yisgood. You said, "I will not accept direct CC or payment service if customer wants it shipped to a different address than the credit card." I was trying to point out that such a practice isn't employed everywhere and some businesses would be ill advised to employ such a practice.
Just how high do you feel are your chances of fraud is on a printer refill cartridge, or a camera battery? Sure I agree on large ticket items shipping to a confirmed billing address is recommended, but to make a sweeping statement that it should be done all the time isn't good business sense.
There is caution and there is panic. Don't sell panic, please.
posted on September 5, 2001 11:09:16 AM new
>>There is caution and there is panic. Don't sell panic, please. <<
There are promises and there are lies and as long as some payment services are selling lies, someone has to present reality.
I was pointing out that sellers should understand the risks. Unfortunately, many don't. Certain payment services that promise protection and then find one excuse after another why it doesnt apply, don't help. Though if the item were shipped to a different address, even this promise doesn't apply.
I have posted in my auctions and on my web site that customers can use a credit card with C2it, which doesn't seem to care what address it goes to. If a customer insists on having it shipped elsewhere, they can either use C2it or use a non-credit card. A csutomer who says "I dont care about your risk, I insist on using a credit card with Paypal, Billpoint, Paydirect and I insist on having it sent to a different address" is not a customer I need. There is a difference between doing something for the customer's convenience and letting the customer dictate terms that leave you wide open. What if the customer said "I expect you to ship as soon as you receive my check," would you advise sellers to do it? It has even less risk than shipping to a different address with a credit card. Checks can not be charged back several months later.
posted on September 5, 2001 11:53:55 AM new What if the customer said "I expect you to ship as soon as you receive my check," would you advise sellers to do it?
I'd tell the seller to think. I held one check because it was being shipped to a different address (different state) than was printed on the check, the signature was a name not on the check, and the buyer had zero feedback, and it was for $190.00. The check was good but I thought caution required me to hold it. By contrast I don't hold a check from customers that have any sort of feedback, or if the item isn't worth stealing (under $50.00.) With good feedback in my eyes I've shipped many times on the buyers word that the check was in the mail, I've never regretted that policy and my return customer rate is extremely high.
What did you think I'd tell the seller receiving a check? Panic? Assume the worst and forget thinking? Apply a etched in stone policy?
I was pointing out that sellers should understand the risks.
So tell me, what are the risks of fraud when the purchase of an printer refill cartridge or camera battery is involved? High? Moderate? Or is it so low as for it not to be worth worrying about?
I admit selling panic is easy, I just don't hold with that thinking.
posted on September 5, 2001 12:17:12 PM new
>>So tell me, what are the risks of fraud when the purchase of an printer refill cartridge or camera battery is involved? High? Moderate? Or is it so low as for it not to be worth worrying about? <<
The risks of fraud with these are a lot higher with credit card than accepting a check. It costs money to stop payment on a check. Somewhere between $10 and $30. The check usually carries the name and address of the account holder and the seller is left with proof of the stopped check. There is no penalty for doing a charge back. All the customer has to do is call their CC company or the payment service and make a claim. The seller doesnt even get any proof in his hand that he can take to court unless he wants to make the effort to get a subpoena. So the value of the item doesnt mean much.
I sell more items from my website than from auctions, so I dont have any feedback with which to judge the customer. And even on auctions, if you invite the customer to use a paypal credit card only with high feedback, you can bet that they will use it even with 0 feedback. So when I post that a customer can use their credit card via C2it, or paypal non credit card payment and I even accept personal checks and they insist that they will only pay with paypal credit card, I have reason to worry. Why? Because even though the amount is small, they are insisting on reserving their charge back rights. They don't trust me with all my feedback. So why should I trust them? I want to reserve my rights as well. They want me to do them a favor and ship to a different address and put myself at risk while they are starting off by ignoring my terms and dictating their own. So I feel justified in being worried. The customers who start off dictating their terms are the ones who are rarely satisfied and quick to charge things back.
We have already seen quite a few posts here about customers who charged back items in the $8 range, months after they were purchased. It has just become too easy. When selling $30 batteries on which I make $5, one charge back takes away the profit of 6 sales. Why should I risk it? I have given my customers every possible way to pay including credit card. Try going to Buy.com and telling them how you will pay. Ask them to ship to a different address than on the credit card. Then try telling them that they're "selling panic."
posted on September 5, 2001 12:33:09 PM new
yisgood,
You seem to be obsessed with fraud being involved if a credit card is used. I didn't just arrive on earth, I've been here for weeks since the spaceship broke down. I've made a few obeservations. Retailers don't share your level of panic, I don't think 1 in 100 examines my credit card to see if the signature matches on the back. I don't think I've ever come across a florist that demanded I come in and pay cash in person or would hesitate to ship to an address other than my credit card billing address.
So one more time. What would you rate the level of fraud being involved when a camera battery or printer cartridge was purchased with a credit card?
1) High
2) Moderate
3) Low
4) So Low as to be considered silly to worry about it
Interestingly enough, I had my card signature checked two times in one day last week when we went to Home Depot and House 2 Home....
I can't ever recall having someone so obviously check the cards....they even had a procedure posted next to their electronic signature box....the signature came up on a screen by the register for the clerk to compare to the card...
Those darn boxes are hard to sign on...surprised the credit card police didn't come for me...
Generally though, I agree that retailers are pretty liberal regarding credit card security, possibly since they can view the customer and get a signature.....however, my experiences last week may be indicative of change in that regard...
In the online world though....wow.....all this stuff is still in its infancy and I predict we'll see a lot of growing pains....hopefully not on the backs of merchants...
If I was trying to defraud sellers, I'd likely do it on 100 printer cartridges rather than one Rolex....seems like the squeaky wheel gets greased more often by law enforcement when big ticket items are involved.
Of course, knowing me, I'd get busted after the first one...
posted on September 5, 2001 01:18:53 PM new
If we're talking just fraud, as in a stolen credit card, then low. If we're talking fraud as in making a charge back, then it makes no difference what you sell. All a charge back takes is a phone call. And if you shipped to the wrong address, you lose. It is growing epidemic. Folks are charging back $8 items. It still costs the seller the same $15 fee in addition to the cost of the item.
You know what has the highest amount of charge backs? Internet porn. Folks pay some fee (I guess in the $20 range) for access to some site and then charge it back. Instead of making $20, they lose $15.
Credit card fraud due to charge backs is growing exponentially. The fraud officer at a major bank told me that there are some accounts who routinely charge back almost every item on their card every month simply because they can. They are hoping that some of the merchants won't respond or will have lost the paperwork and they get the item free. There is an epidemic of Billpoint users who have been charging back stuff for months. Lots of it has been small potatoes. They do it because they can. On bigger items the merchant might go after them but who will go to the effort on a $30 item?
I advocate running your business like a businessman. There is a reason why most sites do not allow shipping to a different address than on the card. And they dont even offer achex or personal checks or c2it, like I do. So if a customer looks at all the methods I offer and insists on a differnt one that puts me at the biggest risk, I say no thanks.
posted on September 5, 2001 02:53:08 PM newFolks are charging back $8 items. It still costs the seller the same $15 fee in addition to the cost of the item.
I suppose if this is a geniune concern and if you feel it is "growing exponentially" then the only viable electronic media that would be safe for buyers and sellers would be an excrow service. God forbid that buyers become as paranoid as some sellers.
What sort of fees are we looking an escrow service to charge on these $8 - $20 items?
I never realized just how much of an experiment accepting credit cards online or via mail order were. This has been a real education for me... I feel so naive... I feel like I've been looking at commerce through rose color glasses for some many years.
posted on September 5, 2001 04:04:55 PM new
>>I suppose if this is a geniune concern and if you feel it is "growing exponentially" <<
it is not "my feeling" that this is growing. It is the reports that I got from three major banks. They have had to increase their staff and are losing fortunes on silly charge backs. One bank told me that this year alone they lost over 80 million in charge backs. How many posts have we already seen here where a buyer whines over a $5 purchase and someone else comes along and tells him to charge it back? The CC industry has just made it too easy. The official rule is that a buyer is only protected if the charge is over $50. Why doesn't the CC industry stick to that?
>>then the only viable electronic media that would be safe for buyers and sellers would be an excrow service.<<
or a service that tries to act responsibly in dealing with these issues and doesnt give buyers and sellers wild promises of protection that they can't keep. I have still not heard of any charge back issues with c2it, moneyzap or achex. Buyers have to learn that it is their responsibility to check out the sellers and not just send off $500 to a hotmail ID with 0 feedback because paypal will protect them.
>>God forbid that buyers become as paranoid as some sellers. >>
Why should they? Charge backs are easy to do. In any case, buyers have the tools to check out sellers. The reverse isn't always true.
>>What sort of fees are we looking an escrow service to charge on these $8 - $20 items? <<
A buyer who wants a $8 item and can't trust the seller enough to use Achex or non credit card paypal payment, should not be buying on line.
>>I never realized just how much of an experiment accepting credit cards online or via mail order were. This has been a real education for me... I feel so naive... I feel like I've been looking at commerce through rose color glasses for some many years. <<
It is only recently that wild promises of safety were made and the information about how easy charge backs were became public knowledge. The hackers who used to buy stuff with stolen credit cards have now been replaced with just plain folks who use their own credit cards (or their husband's) and just charge stuff back. Why rob a bank when you can do it from the comfort of your own home?
This won't go on forever. There are now major banks in the payment service arena and they are feeling the pinch. There are discussions under way to tighten the rules and possibly even make false charge backs a more serious crime. Until that happens, I will exercise caution. Since I offer CC in the form of C2it and it lets me ship to any address, I dont believe I have lost any sales by not accepting PP credit cards, shipping to the wrong address and risking a charge back which would be an automatic loss. You are free to run your business as you see fit.
[i]This won't go on forever. There are now major banks in the payment
service arena and they are feeling the pinch. There are discussions under
way to tighten the rules and possibly even make false charge backs a
more serious crime[/i]
You said you were aware of discussions going on....can I assume in the political arena? If you have any links, I'd be appreciative..
In my view, this balancing of the consumer's right to a charge back is long overdue...
I would like to support those looking to bring a sense of fairness to this electronic C/C payment arena...
On a lighter note, today the wife's Texaco card somehow had become demagnitzed so the paypoint pump couldn't read it....I had to resort to an ancient method of payment...cash...
Pat
edited for UBB flub
[ edited by camachinist on Sep 5, 2001 04:31 PM ]
posted on September 5, 2001 04:54:40 PM new
No, I wasnt talking about the political arena. The problem is not the federal laws, it's the silly way the merchant banks are choosing to apply them. Here is one link that shows what rights the consumer has under law. It is nowhere near as all-encompassing as many believe.
http://www.ftc.gov/bcp/conline/pubs/credit/fcb.htm.
What I meant was an even stronger arena, the banking arena. A lot of banks are upset about their losses. They have been talking to Visa and Mastercard and requesting that the rules be adjusted. They want rules that are fair, more easily understood and applied. It should not be a guessing game whether the buyer should win or not in a particular situation. The rules should cover most of the standard problems. They want to be able to close the account of someone who has a high number of charge backs. One bank told me about someone who charges everything back every month. They would like to cancel his card but he threatens legal action and says he is exercising his legal rights. it is nuts like this that are ruining it for everyone else.
I'm going to do a little studying and bring this to the attention of our VISA supervisor next week when I'm in credit committee....we're a small credit union and have to be careful about such matters...
We've just changed card service vendors so I'll be interested to view any changes to our agreements with them or policy regarding member charge backs...
I normally only approve or deny loans and don't get involved in the rules of service but this one sounds like it's worth taking a look at...
I'm somewhat surprised that, if merchant banks are playing fast and loose with applying the law in these cases, they haven't been sued by merchants individually or as a class...
posted on September 5, 2001 05:51:26 PM new
It's not a matter of playing fast and loose with the law. The law states the minimum rights a buyer is entitled to. The merchant banks have the right to add to this protection. They do so at the cost of the merchant. Some MBs are more generous than others. Some will allow a buyer to charge back the merchandise and keep it too. Others will insist that it first be returned. Some will allow a wife to charge the items and then her husband will charge them back and say he didn't authorize it. Others won't allow this and will tell the husband he should have protected his card. But no matter what the outcome, the merchant can not sue the merchant bank because
1) they will never get a merchant account again
2) most merchant accounts state that there is little to no protection for transactions where the card is not present
3) the terms of their account state that the merchant bank is the final judge in these cases.
If they feel defrauded, they can sue the customer but not the merchant bank. Since it will probably cost them more to sue the customer than they will collect, most just eat the loss.
posted on September 5, 2001 06:58:04 PM new
yisgood,
I'm amazed (and amused) at your endless crusade to panic sellers. You say a buyer worrying about sending $8 online shouldn't be online, and in the same breath you'll give sellers the old "Lions, and Tigers, and Bears" routine.
Hang in there dude, I'm sure you'll find a few to panic.
posted on September 5, 2001 09:44:11 PM new
I have had a few chargebacks. I did not know how easy it was for my customers to do chargebacks. You not only have to send it to their address you have produce a signature and with UPS and Fed Ex leaving stuff on front doors or having an apartment employee, or really anybody signing for a package it is impossible to prove you sent it to them. You could make a living doing charge backs. The banks need to require people that do chargebacks to cancel their card number and reissue it like it was lost. They could also have a limit to 2 chargebacks every 6 months. Anybody that does more than 2 chargebacks every 6 months is crooked or really stupid. When I say 2 chargebacks I mean 2 phone calls. If somebody stole your card there can be a whole bunch of chargebacks at once and that would be considered 1 chargeback incedent.
posted on September 5, 2001 09:52:35 PM newI did not know how easy it was for my customers to do chargebacks.
ecomputeremporium, if you used PayPal and followed the rules, which are far simpler than you describe, you would be totally protected from chargebacks based on claims of non receipt.
