Credit and Debit Card

Fake Newspapers: Chargebacks, Disputes and Credit Card Account Inquiries, Fraud, Chargeback 
Processing, VISA, Mastercard, Amex, American Express, Discover Card, Credit Card Fraud

Fraudulent Chargebacks

This web page details our opinions of and experiences with customers 
who file dishonest and/or downright fraudulent chargebacks:

Credit and Debit Card
, Disputes and Inquiries

Notice to Credit Card Fraudsters:

In the week of June 14-21, 2009, for the first time in 12 years, we lost more money to fraudsters than we took in. We’ve had enough and we’re fighting back. If you defraud us — hell, if you even TRY to defraud us, we’re going to hound you to the ends of the earth and put you in jail if it’s even remotely possible to do so, and that fight will be more public than you ever dreamed possible. We’re declaring all-out wafare on fraudsters. Don’t like it? Too effing bad.

What is a chargeback?

Let’s say you shop online and you find the perfect desk lamp on a popular retail site. It’s only $29.95, so you buy it. You go through the shopping cart and checkout process and use a common credit card. A week later the lamp arrives, but it’s bent, doesn’t work, the paint is chipped, and the cord has bare wires showing through. You’re angry. Trust us when we say you’re angry because this happens to us all the time and WE are angry when it happens.

But still, it’s no big deal. After all, you bought the thing from a reputable vendor and all you have to do is let them know about the problems, and they’ll take care of it with no hassles, right? Of course they will.

Except that sometimes they WON’T.

To settle the matter of your faulty lamp you email and politely explain your dilemma to the offending merchant, but five days later you’ve received no reply. So you ramp it up, and email again with stronger language — maybe a demand with a time limit. A week goes by, no reply. Finally you get REALLY STINKING ANGRY and you call the bastards up, ready to explain your problem in detail and demand a refund or else. But you waste 16 minutes wading through their stupidly-designed phone menu system, only to hear some clicks, then a dial tone.

Some people, like us, go beyond this stage and send nasty, threatening demand-letters by registered mail, and we often have our state’s Attorney General contact the errant bozos on our behalf too. And these things used to work.

Not so much anymore.

When it becomes clear you’re not going to get satisfaction from the retailer you need to file a “chargeback” through your bank or credit card company. Some financial institutions refer to them as “disputes” or “inquiries”.

To file a chargeback you need only contact your bank and explain your problem, and certify to them that you have contacted the business and demanded action, but that no action was forthcoming and now you see a chargeback as your only remaining option. The chargeback is designed to be a last resort.Your bank will then more or less immediately JERK your funds right back out of the scumbag’s checking account and put it back into yours. Your bank will then send a legal, formal demand to the vendor in question and MAKE them put up or shut up. The vendor then has so many days to take care of you and prove that they’ve done so. If they don’t do either, you get to keep your money.

This is all more or less as it should be. It’s a valuable service offered by your card company. For free.

We place up to 25 orders per day to replenish stocks. We used to tell people that online shopping was as safe as it gets. Now, a decade later, we tell friends to be very, very careful. We file LEGITIMATE chargebacks about five times per year, and we ALWAYS win.

The banks and credit card processors do run very highly in favor of the retail customer in these situations. All of the burden is placed on the retailer, with nearly none on the customer. This is because the customer has other options if he doesn’t like the service he gets from his bank or credit card company. He can change banks, change credit cards, stop charging on that card, close his account, etc. The retailer, on the other hand, has no options and therefore NO LEVERAGE AT ALL. The store owner can’t change credit card companies– there are really only three worth doing business with in the US (VISA, MasterCard and American Express, the latter being questionable in the extreme). The retailer simply has no choice but to keep on keeping on with these three companies no matter how badly they treat him. Therefore, the customer ALWAYS gets the benefit of the doubt in any dispute. It’s not a gray area at all — it’s widely known and no one disputes it. No retailer LIKES it, but none question that it is so. It seems likely that retailers will one day realize that the amount of profit they’re hemorrhaging through the bogus chargeback system is intolerable, and they’ll band together to demand proper consideration, or perhaps even file a class action suit against the almost-criminally biased credit card companies.

Unfortunately, the banks and credit card companies have slid SO FAR into the ditch on this issue, that many retailers are struggling under an increasing load of questionable chargebacks, especially in this current economic CRISIS (as Obama was so fond of saying over and over and over and over ad nauseam until the INSTANT he got the money he wanted).

Still, at least so far, retailers can take a few steps to protect themselves against chargebacks. One of the best ways is to sell GOOD PRODUCTS. Don’t sell lamps that don’t work, for instance, and you’ll have far fewer irate customers complaining to their credit card issuer that the lamps they bought from you don’t work. It’s a simple concept that, sadly, many retailers just can’t grasp.

But even then, too many retailers find themselves shouldering too much of this burden, and it’s beginning to cost them, and us, some serious money. The problem lies with FRIVOLOUS and FRAUDULENT chargebacks (often they’re one and the same).

When a customer files a chargeback, dispute or inquiry against a merchant, several unpleasant things happen to that merchant. First, the money the merchant may have rightfully EARNED is mercilessly YANKED from that merchant’s account (and put into yours). If the merchant sells, say, high-end stereo equipment, he might suddenly find himself short $5000 in his account. Typically the merchant will only see that debit in his account but won’t know WHY he was debited, for as much as a week, maybe longer, because while banks and credit card companies are Johnny-on-the-Spot when responding to retail customers, they take their sweet time when dealing with their merchants. These institutions seem to have forgotten that without their merchants, they’d make no money at all.

Eventually, however, the merchant will receive a letter, fax or email from the credit card processor stating that so and so has filed a dispute, for such and such reason. There will be anywhere from about four to twelve or more documents in the packet the merchant receives. In order to argue the dispute, assuming the merchant wants to argue the dispute, the retailer must handle all those forms and send them back to the credit card company with every “I” properly dotted and every “T” properly crossed. The tiniest, most seemingly insignificant error by the merchant can, and usually does, cause the credit card company to rule in favor of the customer, regardless of the merits of the dispute. Many of those forms must be completed with technical order data which has to be searched for on any number of banking websites, and often many new forms must be generated by the merchant to complete the process of addressing the dispute.

It takes us, for instance, at least a solid hour to amass, complete, fax and mail all the documentation required to fight a chargeback. This is time we lose whether we win the chargeback reversal or not. Our upper people make $55/hr. If it takes $55 to fight a $26 dispute, we’ve lost money the moment that customer filed the dispute, whether we win it or not. We still believe in PRINCIPLE (look it up if you can find a turn-of-the-century dictionary — it doesn’t appear in newer editions), so we fight them all if we’re not in the wrong. If there’s a case in which a customer placed an order through us and for whatever bizarre reason the order didn’t get processed and shipped out, we’re more than happy to allow a chargeback to go through without fighting it. After all, the customer didn’t get his product and we have NO RIGHT to have his money in our accounts. The sooner it’s returned to the customer, the better.

However, we would have been much happier had the customer had the simple decency to contact us about the problem first, thereby allowing us the opportunity to fix the problem, to apologize, and to often send the customer a replacement product for free. The customer would have received his refund in about 24 hours using this polite method of doing business, whereas it will take him one to three weeks to get his money back if he files a chargeback. Sometimes the unwashed masses are penny-wise and dollar-stupid. If the customer can’t be bothered to grant us the simple human courtesy of contacting us about a problem, but simply files a chargeback first, then we can’t be bothered to send them any free products or, indeed, ever honor an order from them again. We sell to NICE people, RATIONAL people, HONORABLE people. Period. When we can avoid the other types, we’re happy.

The merchant is also charged anywhere from $15 to 30 for the chargeback by the credit card companies– again, REGARDLESS of whether the merchant wins or the customer wins.

The credit card processor usually also assesses a higher rate to all future transactions by that merchant through that processor — and, yes, this also happens whether the merchant was completely in the right, or the customer was. The merchant gets penalized either way. The merchant has not only lost his time fighting the chargeback, but will rack up long distance fax fees, registered mail costs, copy costs, etc. This is all lost by the merchant whether he wins the dispute or not.

The customer gets charged nothing, even if he loses an outrageously stupid chargeback. That should change, and we think it will.

Because of this, chargebacks are a serious and maddening problem for the merchant. It’s maddening because the vast, vast majority of chargebacks (easily 95%) that are filed against a reputable business could be avoided if customers would simply send an email to that merchant politely describing the problem and give the merchant a day or two to look into it and straighten it out. Only THEN, if satisfaction isn’t received by the customer, should any chargeback ever be filed. A chargeback should be a LAST RESORT, but even bank tellers often encourage their customers to file chargebacks for absolutely silly and whimsical reasons. Good businesses should NEVER have a chargeback filed against them, because they’re ALWAYS ready and eager to make sure the customer gets what they paid for. Indeed, the customer must CERTIFY IN WRITING that he/she has tried to contact the merchant BEFORE filing the chargeback! For a customer to claim, in writing, on a legal document, that he or she tried to contact the merchant, when they didn’t, may constitute an illegal instance of criminal fraud, yet almost all customers will lie about having contacted the company because, in most cases, the company isn’t at fault at all — the customer is simply trying to find a sleazy, sneaky way of not having to pay for the product they ordered.

Unfortunately, since chargebacks are SUCH a headache for any business, some businesses don’t fight them at all. They simply let the customer have his money back, and keep the product too. This has cultivated a vast population of spoiled customers who file chargebacks all day long, on almost everything they purchase, just hoping to play the odds and get their money back on some percentage of their purchases. And the banks and credit card companies absolutely do not care. THEY get paid either way. What’s in it for them to make sure the process is fair, right, or even legal? There is no incentive at all. In fact, there may be an incentive for the credit card companies to actually ENCOURAGE disputes, because they charge the merchant for them no matter who wins!

The number of chargebacks any company receives is usually directly related to the type of product they sell. An “average” business, let’s say a pizza parlor that uses good business practices with national support, might see a chargeback rate of 3-7% of their sales. That means that roughly 3 to 7 customers out of every one hundred will find (or manufacture) some reason to file a dispute with their card company and attempt to get their money back. Some companies, like publishers in the porn industry, might see a chargeback rate of 40%. Other companies, let’s say a fake newspaper company, might see chargeback rates of virtually 0%. That was our chargeback rate for many years, before we started selling “fake pregnancy” products. 0% is STILL the chargeback rate for all of our products except our fake pregnancy gags. Our chargeback rate for fake pregnancy products is now running about .5%, or one half of one percent. Even at that incredibly low rate, it’s a huge hassle for a small company with only a few employees.

When we started selling fake pregnancy joke products some years back, we immediately began to see our chargeback rate start to creep up. Because of that, we started researching the chargeback phenomenon, and we kept detailed records of disputes.

It’s important to take note of the following:

In all of these years, we have never once been subject to a chargeback due to any customer claiming our products were faulty or wrong in any way.

In all of these years, we have never, NOT ONE TIME, had a customer contact us for any reason whatsoever, before filing a chargeback against us (this tells us that NONE of them thought they had a legitimate complaint that they should bring to our attention — they were just hoping to slip the chargeback past us when we weren’t looking, and get back money they didn’t deserve to get back).

Yet EVERY SINGLE FAKE PREGNANCY PRODUCT CUSTOMER TO DATE who has filed a dispute against us has LIED to their bank and claimed that they DID try to contact us, but we didn’t reply to them.

EVERY SINGLE FAKE PREGNANCY PRODUCT CUSTOMER TO DATE has stated, in writing, to their credit card company or bank, on a legal document, that they are disputing the charge to their card because they never ordered anything from us.

We’ve taken our chargeback fighting skills to an art form. We keep meticulous records, and we force a signature for every single product we sent out. If we didn’t, dishonest customers would win every single fraudulent chargeback because we wouldn’t have ABSOLUTE PROOF that they took delivery of the product THEY ordered. When we are notified of a chargeback these days, we have a routine mapped out which addresses every single lie the customer may have told in an attempt to fraudulently steal money from us. We put that data together in a packet and send it by registered mail to the chargeback processing agency. We virtually ALWAYS win, because we provide PROOF that the customer ordered the item, and we provide PROOF that the customer received the item. When we provide the credit card companies with an actual photocopy of that customer’s signed delivery receipt, stapled to the chargeback complaint where that same customer SWORE they never received anything from us, the jig is up. We are now prosecuting every single one of these cases as FRAUD.

You’ll see many retail companies now advising customers that they will charge a fee (often hundreds or thousands of dollars) if the customer files a chargeback against them, regardless of who wins. This is expressly contrary to the contract every merchant must sign to obtain a “merchant account” that enables them to process credit cards in the first place. We also think it’s dishonest and reprehensible even if it WAS allowed by the card companies, because it circumvents a needed and legitimate check-and-balance which allows the customer to seek compensation for terrible service or non-working products. But we are NOT opposed to charging the customer a fee when the customer files a silly, whimsical, and/or fraudulent chargeback against an honest business. We charge such a fee; the customer agrees to it before they can complete ANY purchase through us, and we enforce it. We collect it, and we’re willing to go to court to keep it.

Since adding our line of fake pregnancy items we’ve begun to struggle under an increasing load of silly, fraudulent chargebacks. Very often we’ll receive notification of a dispute in which the customer has filed a chargeback and temporarily gotten their money back simply because they say they “can’t remember” making the purchase from us. We are forced to then invest an hour or more preparing our rebuttal, and we must pay the $15 – $30 “fine” that the credit company charges us for the service of handling the dispute, and we must pay all other fees and costs as well. The customer invariably “suddenly remembers” he/she bought the stuff from us when they’re hit with a mountain of documentation proving it, and they graciously allow US to have OUR OWN money back. Now nice of them. They didn’t have any choice anyway.

Many, many customers are learning that they “just might” get their money back if they file a chargeback against a sleepy, incompetent company which will allow the dispute to go uncontested, so they try it oftener and oftener. There are websites devoted to teaching dishonest customers how to work and cheat the chargeback system in order to steal from a merchant. Only in America! But there are also now websites which purport to track the names and addresses of habitual chargeback-filers and make their lists available to retailers who may choose not to honor any orders placed by those problematic and dishonest customers. We’re watching those services evolve, and will eagerly subscribe to one or several when we see them finally get their acts together.

We also keep our own internal records of people who file chargebacks against us. Since there is NEVER a reason ANY of our customers must EVER file a chargeback against us (for God’s sake, just present your problem politely and we’ll fix it or refund instantaneously), we have an iron-clad, unbreakable rule: File a silly or fraudulent chargeback against us even one time, and you’ll never enjoy our products again. We don’t need your business. We don’t want your business. We can’t AFFORD your business.

We have researched the laws well enough that we are now comfortable filing a criminal complaint against customers who file fraudulent chargebacks and disputes. If you file a chargeback saying that you tried to contact us when you did not, we’ll file a criminal complaint against you and make it public record, searchable on the net. If you file a chargeback stating that you never made the purchase or didn’t receive the goods, we’ll supply documentation proving that the order was placed from your computer and we’ll supply the police with a copy of your delivery signature. This happens ALL. THE. TIME.

This week (in 2009) we’re wrestling with about $500 in fraudulent chargebacks. We’ve already won three of them, with two left to fight. We’ve filed three criminal complaints against dishonest buyers of fake pregnancy items just this week. We’re sick of it.

So, if you have a LEGITIMATE problem with ANY of our products, EVER, simply tell us! It’ll be taken care of ABSOLUTELY within 24 hours. Period. It’s painless. You’ll be happy and we’ll be happy. But if you’re a silly and/or fraudulent chargeback-artist, bring it on.

Let’s reiterate for the logic-challenged: The bottom line is simple: If you EVER have ANY problem with our products, just TELL US! This is a simple concept! It’s not rocket science! There’s a link at the top of every single one of our 2800+ pages which says, oddly enough, “ASK A QUESTION“. People use it every single day. So can you. We usually answer within minutes, often within hours, and ALWAYS within 24 hours. We’ll bend over backwards to make sure you get what you ordered, and if we’ve screwed things up beyond repair, we’ll instantly issue a refund. But if you are simply out to cheat us by sneakily filing fraudulent disputes and chargebacks, and lying about the circumstances, we’ll come after you in every way possible. If you’re west of the Mississippi, we’re willing to sue you personally right in your little home town. If you’re east of the river, we’ll sue you by proxy and we’ll sue you again for the attorney’s fees you’ve cost us. If we must spend $3000 to recover $60 from a CROOK, we won’t hesitate one microsecond to do it.

We’re good, decent, honorable, people who work hard to make sure your products are as perfect as we can possibly make them. We barely make money at this. When someone literally uses us, and cheats us, we take it personally. Like some cartoon character used to say, “You won’t like us when we’re angry”.

We herewith declare open warfare on credit card scammers and chargeback artists. The continued existence of our business leaves us absolutely no choice. Think twice, then think a third time, before even TRYING to steal our money.

For more information try this link: “Fraudulent Chargebacks

Date: 6.24.2009
Author: Tamara
Name (normally hidden): Tamara
Phone (normally hidden):
Order # (normally hidden): none
City or Town (normally hidden): West Palm Beach, FL

OMG your site is hilarious and it’s not the products, although they’re pretty cool too, it’s you style of communication. Up front and center, so refreshing and bold! I was a chargeback manager for an Issuing Bank for years and can validate your chargeback statement. But thought you’d also like to know that the banks must investigate all disputes reported by cardholders in accordance with the Fair Billing Act. If we can validate the charge belongs to the cardholder, prior to a chargeback, we will not process a chargeback. And the customer is required to show effort to resolve with the merchants first. Problem is we have to take their word for it and process the chargeback pending your (merchant) response. And please do not forget that the analyst who process these chargebacks are consumers as well. And many times it has bothered us to have been part of enabling a customer to get away with stealing. But as the Issuing bank we walk a fine line and must validate the result of the chargeback and why the charge was rebilled, if it was. I could go, as you well know, on that topic. 

But I love your blatant honesty! And keep my contact info and if you ever need help with a chargeback give me a call! 

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