Cost Of A Dispute?
I learnt something today about credit card companies; and I’m wondering whether anyone has similar or other experiences to share. This is about a disputed charge for an online transaction. Not revealing any identities here, just the details.
I’d made two purchases from a particular web site; it’s one which is of repute, no fly-by-night deals. As it happened, they were not able to execute the service requested. Their automated system seems to have a bug; the second transaction wasn’t processed, but the first one was.
No sweat - I logged a customer ticket, and then decided to call the credit card help desk. Got through there, and after giving them the details, asked for information on how to reverse the transaction. The response I got bowled me over.
It seems the normal process is to have the transaction tagged as “disputed”; the amount is frozen, the vendor gets an opportunity to revert. If both parties agree, it gets reversed straightaway; if there’s no response, which appears to happen most of the time, there’s a predetermined period after which the funds are released back.
Here comes the surprise - the CS person on the help line told me “Since the amount is below $10, it’s easier for us to waive the charge to your account, since you’re a regular user in good standing. You don’t have to pay anything; the bank will take care of it.”
Apparently, the cost of entering the dispute and waiting for resolution is more than $10; it’s cheaper for the bank to honor the payment and close the case instead. I don’t know where the limit lies, or whether $10 is the real limit.
More importantly - obviously the credit card company makes a great deal through the volume of online transactions, both from vendor and buyer; to the extent where the odd $10 doesn’t warrant any concern, it’s dealt with routinely by front line support.
Have you come across anything similar? Or do you have any inside info that you can share?
Written by 2cworth on November 26th, 2006 with
1 comment.
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#1. November 30th, 2006, at 4:09 AM.
That’s a very interesting fact.
Just the other day I got “double billed” for a $5-or-so item that I ordered online. I was thinking of doing nothing because I didn’t feel like dealing with the process of going through an entire dispute for such a small amount.
Now I’ll just call up and hopefully they will just waive the charge. What bank were you dealing with?
As as side note, I’ve gone through the dispute process before, for amounts up into the thousands, and the credit card companies (Citibank in my case) seem to really be on the consumers’ side when it comes to this. That’s why I use credit cards for almost every purchase these days.