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TL:DR - If a merchant sends you a damaged or incorrect item it is their problem, not yours.  They have to bear the cost of retrieving that item and provide a full refund including shipping costs no matter what their return policy says.  All you have to do is make it available to them.

Know your chargeback rights - don't rely on your credit card company to be honest with you.  One of the biggest Visa issuing banks in the country repeatedly misinformed me about my rights and their obligations under Visa International rules.  They told me I was obligated to pay costs that I do not have to pay, either under Visa Rules or state law.

Background: 
I purchased a new item online.  The merchant sent me a used one that was damaged and in addition had unmistakable signs of wear.  I immediately notified the company that the product was not new, not acceptable and asked for a return shipping label.  The merchant not only refused to retrieve it at their expense, they also insisted I owed a restocking fee.  In all they wanted me to absorb about 1/3 of the cost of the item because of their mistake – they actually expected to make a profit instead of having their error cost them anything.  After multiple attempts to get this merchant to retrieve their merchandise they even accused me of trying to steal it.

I initiated a chargeback with my Visa bank.  To my surprise the Visa issuer reversed the chargeback when the merchant notified them that I had not returned the item at my expense.  When I contacted the bank about the reversal, each and every customer service rep said that I am required to return the item at my expense before initiating a chargeback.  Even a manager said the same thing.  The fact I wasn't sent what I ordered meant nothing.  They also said I am subject to the merchants terms of service no matter what, and that there was nothing to be done about it.  The information they provided was absolutely false.

One of the largest Visa credit card issuing banks in the country is systematically misinforming their customers about their rights and the bank's obligations when customers initiate a chargeback.

______________________________________________

Visa Chargeback Guidelines for Visa Merchants -
Chargeback Management Guidelines for Reason Code 53 - Not as Described or Defective Merchandise

  • For this reason code, the cardholder must have made a valid attempt to resolve the dispute or return the merchandise. An example of a valid attempt to return may be to request that the merchant retrieve the goods at the merchant’s own expense.
  • Merchants should keep in mind that their return policy has no bearing on disputes that fall under Reason Code 53.

The Visa Rules implement the legal concept of Rightful Rejection regularly included in state laws.  Rightful Rejection protects consumers from financial obligation when a merchant delivers wrong or defective merchandise.  All you are required to do is notify them of their mistake and assist them in recovering that merchandise.  You need to make their merchandise available to them for a reasonable amount of time but if they refuse to retrieve it you have no further obligation.  This is spelled out under the the Uniform Commercial Code.The UCC is implemented into state law and the state laws based on it are sometimes almost identical.  You can easily find it online.  Here's the section I'm referring to:

  • (a) after rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful as against the seller; and
  • (b) if the buyer has before rejection taken physical possession of goods in which he does not have a security interest under the provisions of this Article (subsection (3) of Section 2-711), he is under a duty after rejection to hold them with reasonable care at the seller's disposition for a time sufficient to permit the seller to remove them; but
  • (c) the buyer has no further obligations with regard to goods rightfully rejected.

In other words, when a merchant sends you an item that is different than what you ordered, either in condition or other ways, it is up to that merchant to correct the problem at their expense.  Both Visa rules and state laws protect consumers from financial obligations in these situations.  Visa issuing banks have an obligation to require a merchant to retrieve merchandise at the merchant's expense under Visa International rules and can't require the customer to absorb shipping and other costs.  If the merchant refuses to retrieve the item at their expense the bank is still required to process the chargeback. 

If you scale up the dollar amount the law and Visa rules becomes obvious common sense.  Let's say you ordered a $20,000 car that cost $1,000 to ship cross country and they sent the wrong car.  By my card issuer's logic you would have to pay to have it shipped back, would not be refunded the shipping already paid and would be out $2,000.  If you refused to pay to return it you would be out $21,000 and in possession of a car you never ordered.  If you add a restocking fee it may actually become more profitable to send the wrong item than to deliver the correct one.  In my case the merchant has actually sent an item that is significantly less valuable than the one I purchased.  If the merchant does not have to bear the cost of their own error there is nothing to discourage unscrupulous merchants from deliberately sending the wrong or a lesser value item. 

(This post is meant to be a overview of Rightful Rejection and Visa rules as I understand it from personal research I've completed. Legal professionals please correct any mistakes I have made.)

 

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so is mastercard pretty much exactly the same situation I assume?

millervtranger (Sep. 17, 2016 @ 7:19a) |

dup post

millervtranger (Sep. 17, 2016 @ 8:21a) |

That's the thing.  The statement print has no section related to chargebacks, so that was the best language I could find... (more)

SupDude (Sep. 25, 2016 @ 11:36p) |

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Armed with this knowledge, how did your situation work out?

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dcwilbur said:   Armed with this knowledge, how did your situation work out?
  Still in the works because I had to write a letter.  Since I did precisely what Visa rules require of me I don't know how they would justify refusing a chargeback.  Visa International also says that member banks are required to follow their rules.

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send it back for another chargeback. I've seen double chargebacks (And got charged TWICE)

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Thanks for sharing your story, will keep this in mind. You didn't share the merchant, is this someone big like Amazon or someone no-name chinese company?

I try using Paypal whenever possible they're good at dispute resolutions.

oh also, this might impact your credit especially if you dispute the charge a second time with your credit card company.

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wallet99 said:   Thanks for sharing your story, will keep this in mind. You didn't share the merchant, is this someone big like Amazon or someone no-name chinese company?

I try using Paypal whenever possible they're good at dispute resolutions.

oh also, this might impact your credit especially if you dispute the charge a second time with your credit card company.

  
It's a specialized store who for some reason has no idea what state law and their Visa merchant agreement says. 

I can't imagine the bank using this chargeback as a reason to impact my credit score.  I'm simply exercising well defined consumer rights and I have tried for weeks (way beyond what was required) to get this merchant to retrieve their item.  I only had to ask them to do so once.

The store might try something, but the dollar amount really isn't worth their time and they would be told by any judge to take a walk
 

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We need more threads like this more often. Make FWF Great Again!

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nwrain said:   
wallet99 said:   Thanks for sharing your story, will keep this in mind. You didn't share the merchant, is this someone big like Amazon or someone no-name chinese company?

I try using Paypal whenever possible they're good at dispute resolutions.

oh also, this might impact your credit especially if you dispute the charge a second time with your credit card company.

  
It's a specialized store who for some reason has no idea what state law and their Visa merchant agreement says. 

I can't imagine the bank using this chargeback as a reason to impact my credit score.  I'm simply exercising well defined consumer rights and I have tried for weeks (way beyond what was required) to get this merchant to retrieve their item.  I only had to ask them to do so once.

The store might try something, but the dollar amount really isn't worth their time and they would be told by any judge to take a walk

  But the merchant is free to file against your credit report if they think you still owe them the money.  sure, you could then put forth effort and fight it.....

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Bend3r said:   
nwrain said:   
wallet99 said:   Thanks for sharing your story, will keep this in mind. You didn't share the merchant, is this someone big like Amazon or someone no-name chinese company?

I try using Paypal whenever possible they're good at dispute resolutions.

oh also, this might impact your credit especially if you dispute the charge a second time with your credit card company.

  
It's a specialized store who for some reason has no idea what state law and their Visa merchant agreement says. 

I can't imagine the bank using this chargeback as a reason to impact my credit score.  I'm simply exercising well defined consumer rights and I have tried for weeks (way beyond what was required) to get this merchant to retrieve their item.  I only had to ask them to do so once.

The store might try something, but the dollar amount really isn't worth their time and they would be told by any judge to take a walk

  But the merchant is free to file against your credit report if they think you still owe them the money.  sure, you could then put forth effort and fight it.....

 
That would be interesting because according to black letter state law I've done far more than I'm required to do and don't owe them a dime.  Claiming that I do without legal basis would make them vulnerable to a lawsuit. 

Since these idiots don't know what their own responsibilities are and what their signed agreements say, I highly doubt that it would even occur to them to report to a credit bureau.  Even if they did I could easily prove that I don't owe them anything, and that according to state law they abandoned their merchandise a month ago.

Ultimately it's not something I'm going to worry about until it happens.

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I've previously been told by a bank that I had 30 days to initiate a chargeback when Visa's terms were far more generous. Sending a written request for a chargeback and ignoring what I was told on the phone worked out in my favor.

I figure that if I have to appeal in writing to preserve my rights, there is no reason to accept a negative response I get on the phone (and not in writing).

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For all important charge backs, ALWAYS write the letter instead of a phone call.

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nwrain said:   
That would be interesting because according to black letter state law I've done far more than I'm required to do and don't owe them a dime.  Claiming that I do without legal basis would make them vulnerable to a lawsuit. 

Since these idiots don't know what their own responsibilities are and what their signed agreements say, I highly doubt that it would even occur to them to report to a credit bureau.  Even if they did I could easily prove that I don't owe them anything, and that according to state law they abandoned their merchandise a month ago.

Ultimately it's not something I'm going to worry about until it happens.

  
I agree that you shouldn't worry about it until it happens, but remember it's a he said/she said type of argument.  The merchant can prove they shipped you a package and that you received it.  Neither them or you can prove what was in the package when you opened it.

You are arguing that what's in the package is not what the merchant claimed to have sent. 
The merchant is arguing that it is.
Neither can definitively prove that they are correct as the claims are based on credibility.

Winning the chargeback claim just prevents them from collecting payment through your credit card.  It doesn't discharge or settle the debt.

That said, green for posting the Visa Guidelines.  I never knew that it was stated in such plain English from Visa.  This could help a lot of people who get stuck with return shipping fees.

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gatzdon said:   
nwrain said:   
That would be interesting because according to black letter state law I've done far more than I'm required to do and don't owe them a dime.  Claiming that I do without legal basis would make them vulnerable to a lawsuit. 

Since these idiots don't know what their own responsibilities are and what their signed agreements say, I highly doubt that it would even occur to them to report to a credit bureau.  Even if they did I could easily prove that I don't owe them anything, and that according to state law they abandoned their merchandise a month ago.

Ultimately it's not something I'm going to worry about until it happens.

  
I agree that you shouldn't worry about it until it happens, but remember it's a he said/she said type of argument.  The merchant can prove they shipped you a package and that you received it.  Neither them or you can prove what was in the package when you opened it.

You are arguing that what's in the package is not what the merchant claimed to have sent. 
The merchant is arguing that it is.
Neither can definitively prove that they are correct as the claims are based on credibility.

Winning the chargeback claim just prevents them from collecting payment through your credit card.  It doesn't discharge or settle the debt.

That said, green for posting the Visa Guidelines.  I never knew that it was stated in such plain English from Visa.  This could help a lot of people who get stuck with return shipping fees.


Not an accurate assessment.  I provided pictures to the merchant and to Visa that clearly show the condition of the item as damaged and used.  The merchant has not claimed otherwise.  I have asked them to retrieve it 4 times in writing over more than a month, and I can prove that I did so.  They have refused to retrieve the item, in writing, and I can prove that too.

All commerce is based on participants acting in Good Faith.  In this case the merchant would not be able to claim that I have acted otherwise.  I, however, can prove that they ignored state law and abandoned their item as clearly defined by that law.  They would truly be fools to try to claim otherwise.

Besides, the he said/she argument can be applied to every single transaction.  Internet orders can be easily tampered with, as can the invoice for those orders.  Phone orders can be changed by the merchant or claimed to be wrong by the buyer.  The seller can ship a box full of rocks.  When it comes down to it you can't even prove that you have sent someone a registered letter because you could have sent blank pages.  The same is true for a fax.  Even the emails I have could have been modified.  To function at all in the world at some point you just have to move forward without regard for what the other side might do.

 

rated:
So who's the issuer?

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nwrain said:   ....
Besides, the he said/she argument can be applied to every single transaction.  Internet orders can be easily tampered with, as can the invoice for those orders.  Phone orders can be changed by the merchant or claimed to be wrong by the buyer.  The seller can ship a box full of rocks.  When it comes down to it you can't even prove that you have sent someone a registered letter because you could have sent blank pages.  The same is true for a fax.  Even the emails I have could have been modified.  To function at all in the world at some point you just have to move forward without regard for what the other side might do.
 

  
That's my point.  Every internet order relies on trust and good faith.  Once someone proves they can act in bad faith (e.g. ship a used item sold as new), there is no limit to how far that bad faith can go.

Given how crazy the possibilities are, don't go trying to cross that bridge until you get there, but there is no limit to how far fetched the claims can be and it's very difficult to 'disprove' far fetched claims.  Don't get cocky with claims like "...I could easily prove that I don't owe them anything...." and assumptions like "...They would truly be fools to try to claim otherwise...".

A merchant would be a fool to try to sue customers for $1000's for disparagement, but they have and they do.  Most customers successfully prevail too, but at a cost (e.g. time/money).

I don't want to detract too much from your original post though.  What you found is gold for chargebacks where the merchant tries to make the customer pay for return shipping.

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Good post, and good info. As both an avid consumer and merchant myself I've been on both sides of the situation many times. Another tidbit is multiple chargebacks per the consumer will result in mediation/arbitration which is costly to the merchant. From what I've seen, they get dinged a few hundred if that has to happen.

While I am not up to date on specific legal verbiage generally AmEx is very consumer favorable when it comes to it's protections and chargeback rules. Extended periods of time for dispute, easier dispute process, more reasons to be able to dispute, more risk for merchants. Again both sides of the coin I can confirm this. I've won consumer side chargebacks for thousands against the major airlines after 6 months of the original charge and them failing to provide me with an on time flight. I would find this one extremely hard pressed if not impossible to do with VISA/MC. I've not even been able to get VISA/MC to side with me on a major flight change (different day) after months of the original payment.

 

rated:
Where can I pay $20k for a car using my credit card?

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ilikebtmoney said:   Good post, and good info. As both an avid consumer and merchant myself I've been on both sides of the situation many times. Another tidbit is multiple chargebacks per the consumer will result in mediation/arbitration which is costly to the merchant. From what I've seen, they get dinged a few hundred if that has to happen.

While I am not up to date on specific legal verbiage generally AmEx is very consumer favorable when it comes to it's protections and chargeback rules. Extended periods of time for dispute, easier dispute process, more reasons to be able to dispute, more risk for merchants. Again both sides of the coin I can confirm this. I've won consumer side chargebacks for thousands against the major airlines after 6 months of the original charge and them failing to provide me with an on time flight. I would find this one extremely hard pressed if not impossible to do with VISA/MC. I've not even been able to get VISA/MC to side with me on a major flight change (different day) after months of the original payment.

 

 
Thanks for this info. 

I've used Amex almost exclusively for years and they've been great when I've had to initiate a chargeback, but it is so extraordinarily rare for me have to do so I didn't realize there was a big difference between companies.  I had no idea what I was accustomed to with Amex would not be the case with the major Visa card issuer that I just started using.  I had pretty much gone back to Amex because my Visa's customer service has been truly abysmal even outside of their dispute process, but thanks to your info I won't use it at all.
 

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freeka said:   Where can I pay $20k for a car using my credit card?

I've dealt with car dealers that are happy to accept credit cards, in fact I put 1/3 of the cost of my last car on a CC and the dealer encouraged me to do so.  I'd expect that if I wanted to pay the entire amount on CC they'd make sure they increased the price enough to cover the CC fees.

rated:
who is the bank that issued your visa card?
who is the merchant?

EDIT: OP, why are you downvoting me? these are legitimate questions and quite relevant to what's happening to you, and how others can avoid it (both bad merchants and bad banks).

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donperros said:   I've previously been told by a bank that I had 30 days to initiate a chargeback when Visa's terms were far more generous. Sending a written request for a chargeback and ignoring what I was told on the phone worked out in my favor.

I figure that if I have to appeal in writing to preserve my rights, there is no reason to accept a negative response I get on the phone (and not in writing).

  You have 60 days under Fair Credit Billing Act.

Most merchants do send you a return shipping label gratis for wrong item.  As for defective, I do see some merchants try to pass return shipping to you

rated:
Long time lurker, first time poster. I'm trying to navigate Visa.com's site and could only find a PDF geared towards merchants: https://usa.visa.com/dam/VCOM/download/merchants/chargeback-management-guidelines-for-visa-merchants.pdf 

I'm looking for the specific time period that Visa allows for chargebacks. 60 days per FCBA? 90 days?

I'm approaching the 60 day mark since the transaction date of 7/24/16 and began the dispute process with the merchant, which takes up to 14 days. It's a moving labor site that contracts out labor to help load and unload. The movers damaged/broke some items, and I'd like to be compensated. I discovered after the fact this labor contractor has a ton of 1-star reviews for damaging property and being shady and denying damages and dodging lawsuits, so my expectations are low that he will cooperate.

I'm thinking I should begin the written chargeback process with the card issuer (Elan... used the 2% Fidelity Visa card) for a chargeback against the Moving vendor.

Edited to Add:

It's possible I may have waived my chargeback rights by paying in full.  From the Elan Fido credit card statement:
If you are dissatisfied with the goods or services that you have purchased with your credit card, and you have tried in good faith to correct the
problem with the merchant, you may have the right not to pay the remaining amount due on the purchase.

To use this right, all of the following must be true:

1. The purchase must have been made in your home state or within 100 miles of your current mailing address, and the purchase price must
have been more than $50. (Note: Neither of these are necessary if your purchase was based on an advertisement we mailed to you, or if we
own the company that sold you the goods or services.)

2. You must have used your credit card for the purchase. Purchases made with cash advances from an ATM or with a check that accesses your
credit card account do not qualify.

3. You must not yet have fully paid for the purchase.


If this is true, then my only remaining recourse is to wait for the internal dispute process to fail, then proceed to a small claims lawsuit?

rated:
SupDude said:   
If you are dissatisfied with the goods or services that you have purchased with your credit card, and you have tried in good faith to correct the
problem with the merchant, you may have the right not to pay the remaining amount due on the purchase.
...

3. You must not yet have fully paid for the purchase.


If this is true, then my only remaining recourse is to wait for the internal dispute process to fail, then proceed to a small claims lawsuit?

  The section that you quoted isn't about chargebacks.  I highlighted the key phrase.  This is just one of the "well, duh" statements that all too often make it into legal documents.

You need to look through the chargeback-specific section.

rated:
so is mastercard pretty much exactly the same situation I assume?

rated:
dup post

rated:
jagec said:   
SupDude said:   
If you are dissatisfied with the goods or services that you have purchased with your credit card, and you have tried in good faith to correct the
problem with the merchant, you may have the right not to pay the remaining amount due on the purchase.
...

3. You must not yet have fully paid for the purchase.


If this is true, then my only remaining recourse is to wait for the internal dispute process to fail, then proceed to a small claims lawsuit?

  The section that you quoted isn't about chargebacks.  I highlighted the key phrase.  This is just one of the "well, duh" statements that all too often make it into legal documents.

You need to look through the chargeback-specific section.

  
That's the thing.  The statement print has no section related to chargebacks, so that was the best language I could find.  And learning from the OP of this thread, the card issuer could potentially misinform clients about their chargeback rights.

Going back to my original question:  I cannot navigate Visa.com's site on the exact practices on chargeback rights: everything seems to be geared towards the merchant.  I'm having little luck so far -- having opened a dispute on MovingHelp.com -- in getting reimbursed for damages, so a Visa chargeback is the best alternative.  I've just breached the 60 day date since the transaction.  Can someone please let me know how much time Visa allows and provide a link?  90 days perhaps?  My DuckDuckGo-fu and Google-fu must be weak, or Visa makes this information especially hard to find.

Side note:  I'm at my wit's end dealing with moving companies of ill ethics.  I'm reading reviews, and for every negative review (there are tons) citing damage or unprofessionalism, the owner replies and says "Wrong company!  We did great!" or otherwise does really shady lying.  Sorry to sidetrack: Chargeback is the quickest recourse at this point, assuming I have more than 60 days like the FCBA states and allows for a refund when I've already PIF.

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