Debit card "Chargebacks"

[Nick M.K. 574]

Just saw this short article by Lawgistics, an interesting read following the discussion about credit card payments earlier in the week: 

Chargebacks and their kangaroo courts

We are starting to see an increasing trend where clients are on the wrong end of “chargeback” decisions made by weak individuals who will not stand up to consumer pressure.  

To clarify, a “Chargeback” is where a consumer complains to their bank about a debit card transaction alleging that they should be refunded as they goods purchased using that card are defective.  Such chargebacks are not prescribed in law (unlike for credit cards) and so can be more easily abused.

Especially in that banks – who provide the debit card to their customers – generally want to keep hold of them.  So when they get a complaint about a car that has been purchased on a debit card it is very easy for them to simply reverse the deal and arrange for the monies to be returned – usually via the likes of “Worldpay” or “Elavon” (amongst others) who provide the selling merchant with their card machine.  

You would expect a car dealer to be given reasonable opportunity to defend any such allegations but they are rarely given much if any notice of the money about to disappear from their account on the back of a debit card based dispute as to quality of the goods.  Even when Lawgistics provide overwhelming evidence to rebut the allegations, we find that the card providers pay little or no attention and find in favour of returning the monies back into the customer’s bank account.  
 

The point is they do not care about the fact that the consumer may be lying through their teeth but end up with a free car at the end of it. Now we are at the point of advising clients to actively sue the merchant provider for removing funds out of clients’ accounts when (we say) they have no legal right to do so.

 

 

[Linctrader 16]

This is pretty concerning Nick. Makes a case for cash being king again when piss taking like this can go on. 

[Mojo121 229]

Don't take cards full stop. That's my answer to it all.

[It's me 615]

12 minutes ago, Mojo121 said:

Don't take cards full stop. That's my answer to it all.

or use them as deposit only

[Mojo121 229]

4 minutes ago, boring dave said:

or use them as deposit only

... AND LOSE £200??? AVIN' A LAUGH! 

[It's me 615]

6 minutes ago, Mojo121 said:

... AND LOSE £200??? AVIN' A LAUGH! 

most customers dont have cash for a double latte with a dead frog on top so a card depo is better than they go off to the cash machine never to be seen again

 

[David Horgan 564]

Bet they would change their view if we all returned the terminals on same day .

Little to no hope I admit , but it might come to the card companies just going to far and thinking we need them more than they need us .

We have cut our usage of card deals to over 75% less since it went % based charge system , amounts to 160k / 200k a month down on average 

Credit cards were first to go , Now ZERO use. Debit cards May Follow soon as only wants a straw and camels back senerio 

cash and bank transfer for the larger stuff are king .

Might even start with Cheques again  and collect next week  

[metcars 397]

19 minutes ago, David Horgan said:

Bet they would change their view if we all returned the terminals on same day .

 

Sounds like Union talk to me!

[David Horgan 564]

6 minutes ago, met said:

Sounds like Union talk to me!

LOL

Never been in a union , Could be a new experience

 

[metcars 397]

Just now, David Horgan said:

LOL

Never been in a union , Could be a new experience

You'll get thrown out of the forum for 'union talk'

[NOACROSS 414]

19 minutes ago, tradex said:

Now this is very worrying indeed, but not surprising as banks are a law unto themselves.

....next will be clawing back bank transfers for defective goods. I'll be calling our card provider on Monday on this, if true, I'll be cancelling.

...and it will kill the use of cards once word gets around.....great own goal.

Agreed. The first thing I did upon reading this is I printed it out for my weekend staff, with the instructions to only take a deposit on ANY card and to demand the balance by transfer. 

If true, yet another nail in the coffin...

[MrC 142]

I don't take cards. Its not held me up

[DHill 16]

This doesn't sound good... Balance transfers are the way forward until they decide to charge a percentage on them too! 

[AutoJacob 34]

I sell cars up to £3K and take full balances on credit and debit cards.

There is a dealer around the corner from me who sells both lower end stock and prestige cars upto £150K they also take credit and debit cards on everything and anything.

Edited September 22, 2018 by AutoJacob

[Nick M.K. 574]

12 hours ago, AutoJacob said:

I sell cars up to £3K and take full balances on credit and debit cards.

That's absolutely fine. It's all about risk taking. If you are more risk prone you can do really well in this business. 

If a dealer sells a prestige car for 150K on a credit card they are so much braver than me, especially if they used stocking facility to buy that car in. 

[andymc1973 199]

so how do we fight a chargeback?

[Nick M.K. 574]

You take the merchant provider to court for removing funds from your account when they have no legal right to do so.

[EPV 631]

1 hour ago, andymc1973 said:

so how do we fight a chargeback?

IMO it’s; 

Do the job right, cover yourself with the correct paperwork and make it difficult for the punter to have a case. 

My understanding is that when the bank receive a chargeback request from someone they get both sides of the story, they don’t just say “ok mr customer, here’s your money” so if you have done the job right, your risk of being subjected to a chargeback should be very low I think. Almost nil in fact. 

This is really to protect consumers against unscrupulous retailers who misbehave. 

*sorry I have just taken the time to read this properly, this is not a section 75 credit card scenario. Ignore me, i’m talking out of turn

[AutoJacob 34]

We recently had a case on a PX being sold as spares or repairs due to a knocking noise, customer accepted this and after viewing went away to think about it.. they sent via text message "thanks for showing us the car blah blah, we were concerned about the knocking noise would you accept £XXX so we can get the noise investigated".. 2 weeks after they purchased the car for £525 via debit card over the phone we received a charge back letter in the post, the reason was that the car was misdescribed and not fit for purpose. We gathered our evidence and replied one week later.

After a couple of weeks had gone by we won the chargeback case as that single line text message saved our beef massively!

It's not impossible to win these cases although not all cases are as clear cut as mine.

8 hours ago, Nick M.K. said:

That's absolutely fine. It's all about risk taking. If you are more risk prone you can do really well in this business. 

If a dealer sells a prestige car for 150K on a credit card they are so much braver than me, especially if they used stocking facility to buy that car in. 

Absolutely, if we didn't take card we definitely would have lost a few ££££ in deals over time.

I don't think they have a stocking loan.. more like a professional individual that provides "unsecured" loans.

Edited September 23, 2018 by AutoJacob

[Arfur Dealy 823]

Is just me who see this.......Transfers only.... = zero additional fees.. no chargebacks or section 75... oh and the money is in your account within 2 hours.... you can BIN anther car and have it arrive at your site before a potential card payment has even got into your account. 

Why oh why take cards... unless it’s £99 deposit. 

[Nick M.K. 574]

14 minutes ago, Arfur Dealy said:

Why oh why take cards... unless it’s £99 deposit. 

THIS. 

EVERYONE that sells anything online these days needs to have the ability to take a deposit and customers trust card-over-the-phone more than anything else. You take £50-£99, they are YOURS. They stop searching, stop browsing, they start to develop a sense of ownership. 

Also, if you will be any good at selling stuff online you need to buy stuff online, all the time, to experience that mentality, that moment of clicking the BUY NOW and taking the plunge rather than closing the browser window and not even remembering that desire to own whatever you were about to buy. 

[Rory RSC 596]

14 hours ago, Arfur Dealy said:

Is just me who see this.......Transfers only.... = zero additional fees.. no chargebacks or section 75... oh and the money is in your account within 2 hours.... you can BIN anther car and have it arrive at your site before a potential card payment has even got into your account. 

Why oh why take cards... unless it’s £99 deposit. 

Makes sense to me.

Problem is when selling more expensive cars a lot of folk have a limit of £10k so can't do bigger transfers on the day which is frustrating when all your cars are ready to drive away.

I think online banking will only get better and more efficient to be fair. 

 

[AutoJacob 34]

14 hours ago, tradex said:

Debit card, not credit card? 

Yep debit.. their bank Santander entertained the claim but ultimately decided not to defend the claim any further after our correspondence.

[stockedup! 63]

Go to the cash machine with them to get a deposit.....like we did in the good ol days!

[It's me 615]

2 minutes ago, stockedup! said:

Go to the cash machine with them to get a deposit.....like we did in the good ol days!

not one for miles round here so while im out someone might nick the kettle