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Thread: Customer wins chargeback even though shipper said customer refused order

  1. #1
    Junior Member Token is on a distinguished road
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    Customer wins chargeback even though shipper said customer refused order

    Hello, I am an online retailer dealing with automotive products and have recently lost a chargeback case to one of my customers.

    I had the customer order a product off of my website and after one week the customer calls saying that they wish to cancel the order. I told them that their purchased item is already on route and shipment can not be stopped. I mentioned that once the item is delivered, ship the product to us and we will issue a refund. I also mentioned that the customer is responsible for shipping charges and a restocking fee applies which the customer has to pay. Note: This statement was a mistake telling the customer at this point about fees that are going to be applied to them.

    The customer responds back saying that shipping is free so why do they have to pay. I mentioned that the product they ordered did not have free shipping included and that has nothing to do with my company if they need to return the item. This statement from the customer gave me an indication that they might of been looking at another site, saw free shipping and tried to cancel the order with my website.

    The shipping company has indicated that the item was refused by the customer. This shipping company first calls the customer to setup a time and date for delivery of their purchased item and it was on the phone that the customer said to the shipping company that they don't want the item. This I believe was an attempt to not pay shipping charges, however, the customer didn't realize that nothing is free in this world.

    Once the item was returned, a shipping charge plus a restocking fee was taken out of their refund. The customer complained now saying that if they have to pay for the item then they want the item back. I informed them to purchase the item on our site if they want it. So now the customer says they never receieved the item and they want their money back.

    After contacting all parties involved including the shipping company which informed me that the item was refused by the customer, I told the customer that they refused the item and the shipping company has this on file that they refused it. Sometime later I get a chargeback from this customer.

    After going back and forth with merchant services, merchant services let the customer win because the shipping company could not give me any proof that the delivery was made or refused. I have terms and conditions, return policies that meant nothing and merchant services removed the money out of my account.

    What really bothers me is that no matter what shipping company you use, if a customer wishes to refuse an item, there is nothing on this earth that is going to make them sign some document saying that they refused shippment. It is the word of the shipping company to the word of the customer and the customer wins. Now I am out the website price of this item, not the wholesale price at which I paid.

    Now my question is how do we as retailers protect ourselves against this kind of fraud? And how can any organization like merchant services get away with not abiding to the legal documents that companies have on their websites that are there to protect the company from this kind of stealing from these kind of stupid customers?

    If anybody has any idea on a solution, it would be great!

    Thanks,

  2. #2
    Member MoneyBroke is on a distinguished road
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    Re: Customer wins chargeback even though shipper said customer refused order

    Sadly I believe that the only way to get around this type of fraud is by taking them into a court room. However it is often a long process and more costly than the item itself so most retailers do not bother and let them perform the chargeback. At least in this case you only lost the amount you needed to pay to the shipment company and still have the item itself.

  3. #3
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    Re: Customer wins chargeback even though shipper said customer refused order

    Actually I lost money for the complete web price and the shipping cost. Thank you for your comment. Would you or anybody else know if there has been a successful class action lawsuit against merchant services.

    It is merchant services that rules in the customer's favor and completely ignored my websites return policy, terms and condition and the business practices of the shipping company. That would be interesting to go after the source of the problem like merchant services, because you get ride of one dead beat customer, 10 more pop up.

    Thank you.

  4. #4
    Junior Member Jeanie is on a distinguished road
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    Re: Customer wins chargeback even though shipper said customer refused order

    I'm not understanding why the customer was not entitled to the refund when the delivery of the item was refused. Why would a customer pay for an item they didn't take? Of course, the shipping and restocking fee should not have been refunded. Is that what you are talking about?

  5. #5
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    Re: Customer wins chargeback even though shipper said customer refused order

    I refunded the customer a portion of what they paid for. I factored in shipping charges to have the item shipped back and restocking fees. Now, the customer did not what to pay to return the item back nor did they feel that they should pay the restocking charge. So they said that they never received the item nor did they talk to anyone to refuse anything, which is in contradiction to what the shipping company has said.

    This is normal reaction when we return an item. We want to return the item and get the full price back no lost money. In automotive, restocking fees are imposed on retailer's like myself from the manufacture which I have to charge the customer.

    My point is that my company, the manufacturer and the shipping company have a job to get the product to the customer. But some customers change their mind in mid flight and then cause problems for everyone else.

    I believe that merchant services should not have the authority to reward a customer in this case because we made every effort to process the order and get the customer their order. They probably found the item cheaper elsewhere and wanted to bail from the order with my company.

  6. #6
    Member Charged is on a distinguished road
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    Re: Customer wins chargeback even though shipper said customer refused order

    Sadly merchant services will always side with the customer rather than the seller. You may just need to let this one slide as customers can make a chargeback request mostly without any evidence.

  7. #7
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    Re: Customer wins chargeback even though shipper said customer refused order

    This is exactly what concerns me the most. The dollar amount is something that is manageable at this point, however, I sell items $20000.00+ These items that are high dollar amount, I say only wire transfers accepted. This is the only way to protect myself.

    I do have for example brake kits ranging from $2000 up to $8000. If I begin to say wire transfer for these items as well, customers will most likely go elsewhere.

    I just wish there is some way to deal with merchant services, because they have made themselves the judge, jury and executioner which I believe is way too much power for one organization.

    Thanks for your comment. I will keep looking for a solution, even though I may never find one.

  8. #8
    Junior Member OnlineNewbie is on a distinguished road
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    Re: Customer wins chargeback even though shipper said customer refused order

    There is chargeback insurance which protects you against a chargeback and returns you the money and lost profit. This might be one option to look into, I have also heard that some merchant services will fight a chargeback.

  9. #9
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    Re: Customer wins chargeback even though shipper said customer refused order

    Thank you, I will definitely look into that. Just one chargeback might be enough to pay for the insurance.

    Thanks again!

  10. #10
    Junior Member morgan is on a distinguished road
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    Re: Customer wins chargeback even though shipper said customer refused order

    I hear you Token and I am beginning to realize that in any sort of business, the customer is always right. Is it the case that the customer expected the item to be shipped in less than a week?

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