? about chargebacks

[Rick_G]

We had a customer dispute their credit card charge for a delivery I made a couple of weeks ago. I got the notice yesterday. This is only the 3rd chargeback we have seen. I spoke to the customer last night and he admits he ordered and recieved the food. He offered, over the phone, to pay me the amount of the bill, but I told him to contact his card company and remove the dispute since there is a $20.00 fee associated with chargebacks. I faxed a response to my processor with the required documentation, and a recap of the discussion I had with the cardholder. I followed up with a call this morning to my card processor. They informed me that it is standard procedure, and in the merchant services agreement, that I have to pay the service charge even if I prove my case and the actual chargeback is reversed. The $23.19 will be redeposited in my account but I will be charged an additional $20.00 on my account monthly statement.
This is like being found not guilty in court and then having to pay court costs.

Is this really standard procedure? Up until this point I was fairly happy with my processor, but this just isn’t right. Granted it’s only $20.00 but it’s unethical and I place a lot of value on treating people fairly and I expect the same.

Rick

 

[mrkona]

Wow, that sounds pretty bogus! I would think that if anything, the CC processor would charge the cardholder… not you! I haven’t had this issue before… I have had a couple of chargebacks, but they (unfortunately) turned out to be legitimate errors on our part…

BTW - why did this person dispute the charge in the first place, only to admit to ordering and receiving food from you? Can you put a big black mark next to him in your POS system?

 

[SolutionsGal]

Is this really standard procedure? Up until this point I was fairly happy with my processor, but this just isn’t right. Granted it’s only $20.00 but it’s unethical and I place a lot of value on treating people fairly and I expect the same.
Rick
[/quote]

Hi Rick,

It is standard procedure to charge a fee of $20-25. The processor has to research the disputed transaction and that takes man hours. HOWEVER, if your cc processor wants to keep your business you should put the pressure on them. Food/Beverage businesses are not considered high risk for chargebacks, the tickets are typically smaller and the customer is normally seen during the transaction. When we have situations like this, it is not worth the argument over the fee and we refund it.

Good Luck

 

[NicksPizza]

mrkona:

Wow, that sounds pretty bogus! I would think that if anything, the CC processor would charge the cardholder… not you! I haven’t had this issue before… I have had a couple of chargebacks, but they (unfortunately) turned out to be legitimate errors on our part…

To piggyback on Solutionsgal, we had the same thing happen with our processer, and got gigged for THREE of these fees. Had a Credit Card machine crash without a detail report of charges . . . and e had not settled for the night. Nightmare that won’t happen again. We got it all cleared up, but hte PROCESSOR double entered some charges that we backe dout immediately. So, we got gigged for all the additional connection fees for each of about 30 accounts, the three dispute fees from people who saw the charge, but not the re-credit, and then the Processor refused to admit their complicity. We have a new processor now.

Chargeback is hideous to the restaurant who gets smacked with it.