My understanding is with the major credit card providers (VISA is the one I have in mind, but I’m asking in general), if I buy something and the seller doesn’t deliver, I can simply dispute the charge with my credit card company. So if I buy a ticket to an event and it is cancelled, or a t-shirt that’s never delivered, I just tell the card company ‘they screwed me over, I want my money back’ and the card company handles it from there. However, I’ve heard that there are businesses who’s approach to minimizing chargebacks is to simply forbid them in their purchase agreement, and I’m wondering if they can really get away with that, or if it’s just bluster on their part.
For an example: say ABC corp is running a convention, and ABC contracts with XYZ corp to handle ticket sales. XYZ corp sells a ticket to my by credit card and sends me a ticket. Later ABC corp runs into problems, and has to cancel the convention. Since I’m not getting what I paid for, I dispute this with my credit card provider, but XYZ corp says ‘hey, you can’t do that, our terms and conditions that you clicked yes to say that if there’s a cancellation you have to seek a refund directly from ABC corp, we gave you the ticket so we’re out of the loop now’. Would that arrangement be generally valid under their agreement with the card company, and I would just be out my money unless ABC corp issued a refund, or would the agreement be considered invalid and the card company would still deal with XYZ corp on my behalf?
Under federal law, you can dispute the following:
[ul][li]Someone else used your card without permission. [*]There was a billing error. [/li][li]You’ve made a good-faith effort to resolve a problem with the merchant.[/ul]Cite.[/li]
I don’t know about the specifics of buying a ticket to a cancelled event. I also don’t know if a credit card company can simply tell you that they won’t help you with a disputed charge. They might be able to put it in the agreement.
But even if they will help you, you need AFAICT to talk to the merchant first.
I’ve had a chargeback in a case where the purchaser never spoke to me before contacting the credit card company. When I called her to see why she was unhappy with her purchase, she told me her husband would beat her for using the card without his permission. Rather than argue with her or the credit card people I sent the account to collections.
I do not see how they can forbid chargebacks in their purchase agreement. Sure they can put it in there to hope you listen to them but I cannot see how it is enforceable.
They have an agreement with the credit card company and you have an agreement with the credit card company. One cannot affect the other.
That said the merchant can still do things to discourage you from making a chargeback such as refusing to ever do business with you again in the future. So if that ticket company was (say) TicketMaster you could never buy tickets from them again if they know it is you buying the tickets (just an example…not sure if TicketMaster has that policy).
Supposedly Steam, the PC game retailer, will cancel your account if you do a chargeback.
It is better if the customer actually talks to the merchant first. If there is a problem, then I will have no problem refunding money. That doesn’t cost me anything but the money I have chosen to refund.
If you have too many chargebacks, though, then your merchant services company may raise your rates or even drop you.
Assume I talked to XYZ corp, and they said “refunds have to come from ABC corp”, and I talked to ABC corp and they said something like “We’re in bankruptcy proceedings so we can’t issue any refunds” or “we’ll work on possibly getting you a refund soon” a week ago. In other words, there are flat refusals or no real action from both the merchant and the person the merchant said to talk to to issue a refund. I’m not really concerned with the steps to get to the charge back, but with whether a merchant can make TOS that prevent you from going to the credit card company if they won’t deliver and won’t refund your money.
I looked up Ticketmaster’s actual policy, and it’s different than what I’m talking about. Ticketmaster does include the ‘you will not seek a chargeback’, and that they will probably not accept your card again if you do one, but also guarantees a refund for a canceled event. In the case I ran into, XYZ corp refused to issue refunds for canceled events, and said essentially ‘if you want a refund talk to ABC corp, we’ve already given them the money and we expect you to go after them for it’. So I wouldn’t run into a problem with TM, their policy is that you will always get a refund for the ‘purchase not delivered’ case.
So far it looks to me so far like a blanket ‘you may not make chargebacks’ policy won’t actually stop you making a chargeback if they don’t deliver the event/refund. The company might blacklist you afterwards, but they will still be out for the ticket and the chargeback will almost certainly be upheld.
My understanding of the contract is that you as cardholder have an agreement with the card company. You can do a chargeback if the transaction was not completed - i.e. the merchandise or service contracted for was not delivered as promised. From what I’ve heard, when you dispute a charge the card company contacts the merchant, and the merchant must demonstrate(? assert?) that they have delivered the goods as promised. I haven’t had to do a chargeback like that since the sign and carbon copy days… (Idiot or careless merchant seemed to have processed same charge twice.) You may get a bit of back-and-forth to determine who is telling the truth, but ultimately it comes down to whether the goods were delivered as promised.
At that point, it’s between the merchant and the credit card company; I assume if they insisted on arguing, the credit card companies would cut them off. In the case for example where charter tour operators have gone bankrupt, the general comment is that “if you bought your ticket with a credit card, you’re safe. The credit card company will refund your money.” The tour operator is usually sitting waiting for a large amount of cash to be forwarded to them, so there’s a lot of money to recover.
This doesn’t allow you to say “I’m not taking the trip, so I want a ticket refund”. As long as the merchant was ready to deliver, your failure or changed mind is not grounds for a chargeback if they have a “no refunds” policy.
(Many years ago too, I took a ski bus charter from Toronto. They said “any card but American Express”. I asked why, and they said that Amex could take up to 3 months to forward the money to them. For most credit cards, there’s a lag between when you pay and when the merchant gets their money.)
Unless the merchant is well down the road to bankruptcy, the last thing they want to do is piss off a credit card company. IIRC in the early days of internet porn, one news story about it said there was one company that accounted for a huge percentage of the total chargebacks in the USA that year. After the fraud became rampant, the credit card companies introduced new merchant agreement rules, that if a merchant had more than X% chargebacks they incurred a “fine” for each one - so a bad idea to act in a way to encourage chargebacks.
You have an agreement with your credit card company, and your merchant has an agreement. These agreements may vary slightly depending on the card, but they are ultimately what governs disputes.
Some common things.
If you feel that you have been treated improperly, you are always free to file a dispute with your card company. They may require that you try to resolve it with the merchant, and there is certainly a time window that you must file your dispute within. They may or may not issue you a provisional credit. They will investigate and you will be informed of the ultimate outcome when they complete the investigation.
Merchants will often try to impose harsher rules than the credit card companies allow. These are typically not binding and fall into the category of hoping you will be gullible enough to accept them
For example, that minimum charge thing you sometimes see at stores is usually specifically prohibited in their user agreement. If they refuse a small charge take a picture of their sign and report them. Their fees will go up and they may be warned or fined. You broke it, you bought it, no chargebacks, exchanges only are other examples of dubiously enforceable store policies.
Ticket resalers are intimately familiar with all of these rules, more than most. They have very high dispute rates, and are pretty good at knowing just how far they can push things without getting a chargeback. They often win disputes, but that doesn’t mean you can’t try if they treat you poorly.
And the reason that merchants were doing this is, before dodd-frank, the merchant services provider may be charging several dollars per transaction. There was no limit, so every merchant essentially got what they got.
If you buy a $0.50 candy bar, the store would have to pay ~$1.50 plus another ~5%. That is why they started requiring minimums, so that they weren’t driven out of business by paying more for the transaction than the item is worth, much less the markup on it. Dodd-Frank did limit the rates that credit cards can charge, so it’s not as extreme, but it still adds up.