Let me tell you I dealt with credit cards for most of my life and in your merchant agreements it is the merchandiser’s responsiblity to obtain an authorization each time the card is presented.
He is scaring you. This is what happened. He took your credit card. He needs to OBTAIN AN AUTHORIZATION at the time of THE SALE. He did OK. But authorizations are only good for 3 to 10 days depending on your agreement. This guy probably got an OK on the card waited three weeks to bill you and then couldn’t get it. The original authorization was expired. So what happened he’s screwed.
So he threatens you.
Did you buy a service. I ask this cause I deal in hotels. Let’s say you hold a room with a credit card. MOST (but not all, for instance special rate rooms bill upfront) will not bill you unless you are a no show. Well people have learned this so they simply call in the card as stolen. I go to bill it and can’t do it. Oh well the hotel loses money.
So what I do is if we are in a sold out situation I go ahead an authorize the credit card two days prior to arrival. I always find at least 10 reservations. I cancel the reservations and we aren’t oversold and you don’t have a room. Cause we require a valid credit card.
The only exceptions to the AUTHORIZATION rule are as follows. If the lines are down you have an automatic amount you are covered for. In our case our VISA limit is 500.00. So let’s say our line is down and I don’t get a authorization for your card. If the lines are down and we report it, I’m cleared for any charges you make up to $500.00. Any higher charges I have to call in via an 800 and get an OK.
If I don’t call it in well we are in violation of our merchant agreement and we lose.
Of course the merchant can say you “stole” the merchandise, but that means filing a police report and having them search your home for being in possesion of goods from a store that you don’t own. The check to credit card is not a valid analogy.
The merchant was pretty dumb. He should have done a force thru. What that is, let’s say a desk clerk screws up doesn’t get the code, or fails to write it down. I ask did you get it. He says yes. I simply put the transaction thru with a forced code as "OKNC31804. This will charge the transaction to your account BUT if you dispute it I automatically lose as I have no back up.
But now you say wait…what if it would push me over my limit. The credit card company doesn’t care. As long as you didn’t dispute it, the company would bill you and charge you an “over the limit” fee. Check your agreement, most people fail to realize virtually all credit cards will charge you this fee.
Here is another tip. The average chargeback to a VISA or MasterCard is 15.00. At the last hotel I worked for it was $25.00. That is what the credit card company charges us for an investigation of a charge. If a customer were to complain and said they would charge back the item AND their charge was less than $25.00 I automatically took it off as it would cost us MORE to have the credit card company investigate us.
The only risk you would have is if the credit card company finds in the merchant’s favour the merchant can report this on your credit report as a nussance(sp?) chargeback. But that is very unlikely to ever happen.