Best of the ISP-Lists

That's Not What I Bought

Members of the ISP-Investor list discuss what happens when you sell ISP equipment to someone who signs off on an American Express credit card and then refuses to pay.

[December 27, 2001]

On the ISP-Investor list in December, NK inquired,

"I sold $10,000 worth of equipment to a customer who then said it wasn't what he ordered. We sent him exactly what was on the purchase order, and I can't get a refund from my supplier without paying a restocking fee. I have a signed American Express receipt and a purchase order. He has disputed the charge, and he still has the equipment. I have heard that AmEx usually honors the chargeback. Any advice?"

A number of respondents warned that credit card companies usually side with the consumer:

[JW advised] "Get an attorney. Credit card banks, and American Express in particular, will usually side with the cardholder. The only thing that will really hold up is a contract with the buyer stating restocking fees and so on. From the merchant's standpoint, AmEx is really bad to do business with because they're expensive, and you as a vendor have no support."

[JN agreed] "AmEx could care less if they lose a seller because of pro-consumer activity. Credit card companies are consumer service companies."

[MD noted] "AmEx typically will do the chargeback. However, they will not do it if you haven't received the equipment back. Make sure you keep stating that he still has the equipment and is refusing to pay. Does the purchase order say that you will only accept returns within a certain number of days? Does it say that there will be a restocking fee for any returns? Those are always good to have in there."

[TB observed] "AmEx has been really good about taking our side on stuff like this, as long as there's signed paperwork."

[JB disagreed] "I'm still disputing an AmEx charge made almost a year ago for a bad hotel that tried to nick me for the remaining reservation when I left in disgust. AmEx honored the merchant's request for billing."

JN noted that it's probably best to compromise for the sake of efficiency:

"Time is your enemy in these cases. If he delays and finally pays, he gets a delay on the costs. If he delays and you finally end up taking the equipment back, you lose serious value. If someone says on the day they receive a shipment that it's not what they want, you should probably take the hit and allow them to return it."

— End