Why I almost filed chargebacks (against a “fishy” local store!)

by Neil Moncrief on June 2, 2014

Recently, while looking through my CC statements from Discover and Capital One, I noticed unrecognized charges had been made on each card by the same mystery merchant.  Both charges were close to $100 each.  Instead of showing a business’ name, the charges listed a woman’s name and our city (Albany, GA) as the identifier for the merchant.  I asked my wife (Karen) if she recognized the name.  (Karen was my first suspect because she sometimes buys clothes from women who make deliveries to local schools, and those are usually the type people who set up merchant accounts without a “normal” business DBA name.)  She assured me that she didn’t.

Automatically suspecting fraud (it is my job after all), I picked up the phone and called Discover.  Karen sat in my office as the story unfolded, constantly reassuring me that she was innocent.  While waiting for Discover’s fraud department to pick up, I explained to Karen how the “merchant” was going to be hit with 2 chargebacks due to the disputes, costing them up to $60 or $70 in added fees.  We agreed we would feel bad if the charges turned out to be legitimate.  That’s when Karen had a stoke of genius and suggested I Google the person’s name and see if anything popped up that we recognized.tropical fish

Right there on Google’s 1st page, below the phone book listings, was the answer I needed.  The woman was listed as the owner of a premier local aquarium store.  My youngest son, Carlson, is really into saltwater aquariums, and he spends a lot of time there.  Suddenly, Karen remembered that she had used 2 of our credit cards (in the same month) to help him make purchases.  By the time Discover came back on the line, the mystery had been solved and the chargebacks were avoided.  The merchant never even knew that she’d dodged a bullet.

So what’s the moral of the story?  I’ve said it before in other posts, but it bears repeating.  Unrecognized charges are a top cause of chargebacks.  Even when there is no fraud involved, it’ll cost you a chargeback fee (which is never refundable) if a customer disputes a charge because he/she can’t identify your business on their CC statement.  Avoid the cost, hassle, and customer embarrassment by including a DBA name when you set up your merchant account.  Even sole proprietorships can, and should, do this.  It’ll keep your customers from smelling something “fishy”.

{ 1 comment… read it below or add one }

Prashant October 2, 2014 at 7:35 pm

One other point that seems significant in its senabce is friendly fraud. I think we’re going to see a huge increase in that. And I think it’s going to happen as soon as Christmas shoppers start getting their monthly credit card statements. In this economy we’re going to see more and more people trying to get something for nothing. It’s just too easy, in spite of the fact that some issuers are clamping down.

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