On 28-Feb-12 01:37, Roland Perry wrote:
In message , at 13:38:33 on Mon, 27 Feb
2012, Stephen Sprunk remarked:
If the card company finds in favour of the consumer, I'm sure the
merchant doesn't get paid,

The merchant was _already_ paid, so if the dispute is resolved in favor
of the consumer _and_ the merchant is liable for the fraud, the
merchant's account is charged back.

It's not always a fraud. Chargebacks can arise because an item is "lost
in the mail".

If the goods are "lost in the mail", that is not fraud (since fraud
requires intent), but it is the merchant's responsibility* to cure that
defect. If they do not, it becomes fraud. The merchant will likely
give the customer the option of a refund or reshipment, neither of which
is fraudulent.

(* Unless the sale is "FOB origin", which I've never seen for retail
sales. The normal terms are "FOB destination". Note that the US
definitions for these terms are inconsistent with Incoterm.)

And when I say "merchant doesn't get paid", that's obviously a
reflection on the situation after the chargeback has been received, not
a comment on the short term flow of what are only semi-cleared funds.

At a high level, yes, but this discussion is at a level of detail where
such simplification is IMHO not appropriate.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

In message , at 11:04:37 on Tue, 28 Feb
2012, Stephen Sprunk remarked:
On 28-Feb-12 01:37, Roland Perry wrote:
In message , at 13:38:33 on Mon, 27 Feb
2012, Stephen Sprunk remarked:
If the card company finds in favour of the consumer, I'm sure the
merchant doesn't get paid,

The merchant was _already_ paid, so if the dispute is resolved in favor
of the consumer _and_ the merchant is liable for the fraud, the
merchant's account is charged back.

It's not always a fraud. Chargebacks can arise because an item is "lost
in the mail".

If the goods are "lost in the mail", that is not fraud (since fraud
requires intent), but it is the merchant's responsibility* to cure that
defect. If they do not, it becomes fraud.

Or many people would class it as either negligence, or an unwillingness
to believe the customer (many of them are fraudsters too) that it really
is lost.

And when I say "merchant doesn't get paid", that's obviously a
reflection on the situation after the chargeback has been received, not
a comment on the short term flow of what are only semi-cleared funds.

At a high level, yes, but this discussion is at a level of detail where
such simplification is IMHO not appropriate.

We both apparently know what the process is, so no need to press the
point.
--
Roland Perry

On 27-Feb-12 14:50, Adam H. Kerman wrote:
Roland Perry wrote:
at 10:07:03 on Mon, 27 Feb 2012, Stephen Sprunk remarked:

Note that failure of the consumer to pay their credit card bill does
_not_ result in a chargeback, contrary to Adam's ridiculous claims.

Indeed, as long as the failure to pay was "because I have no money",
rather than "because I dispute the charge".

When a customer disputes a credit card or charge card transaction, it is
removed from their bill until the matter is resolved, so it doesn't fit
the usual definition of "unpaid".

Nor is it "paid". If the card company finds in favour of the consumer,
I'm sure the merchant doesn't get paid, whether the transaction was
originally authorised or not.

If authorized, the merchant is paid if the dispute is due to third party
fraud.

The merchant always gets paid. However, if there is a dispute, the
merchant may or may not (depending on various factors) be charged back.

This is why they go through the authorization step, and don't just
submit credit slips for unauthorized transactions that don't require
purchase of very expensive cash register terminals.

"Very expensive cash register terminals" are not required for
authorization; they can use cheap separate terminals, and if desired
they can authorize by a call to the processor's 1-800 automated number
from a standard telephone.

Their merchant fees or fraud liability may be lower for certain types of
authorization, but that's it.

If the merchant is at fault, say for services not rendered, he's not
paid.

Wrong. The merchant is paid as soon as the transaction is posted,
before the customer ever has a chance to dispute the transaction.
However, in some cases a dispute _may_ result in a chargeback--different
from not getting paid in the first place.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

On 28-Feb-12 12:39, Roland Perry wrote:
In message , at 11:04:37 on Tue, 28 Feb
2012, Stephen Sprunk remarked:
On 28-Feb-12 01:37, Roland Perry wrote:
In message , at 13:38:33 on Mon, 27 Feb
2012, Stephen Sprunk remarked:
If the card company finds in favour of the consumer, I'm sure the
merchant doesn't get paid,

The merchant was _already_ paid, so if the dispute is resolved in favor
of the consumer _and_ the merchant is liable for the fraud, the
merchant's account is charged back.

It's not always a fraud. Chargebacks can arise because an item is "lost
in the mail".

If the goods are "lost in the mail", that is not fraud (since fraud
requires intent), but it is the merchant's responsibility* to cure that
defect. If they do not, it becomes fraud.

Or many people would class it as either negligence, or an unwillingness
to believe the customer (many of them are fraudsters too) that it really
is lost.

That's why any sensible merchant uses some sort of shipping with
delivery confirmation. Once delivered, their liability for a "FOB
destination" shipment ends.

Also, most customers _expect_ shipment tracking these days, and are
willing to pay a few dollars extra to get it. I would not do business
with a merchant that didn't offer _at minimum_ delivery confirmation,
for exactly this reason. I've had shipping problems in the past (mostly
with DHL, but once with UPS--never with FedEx) and have no desire to get
into a battle with the merchants or my bank over whose fault it is.

And when I say "merchant doesn't get paid", that's obviously a
reflection on the situation after the chargeback has been received, not
a comment on the short term flow of what are only semi-cleared funds.

At a high level, yes, but this discussion is at a level of detail where
such simplification is IMHO not appropriate.

We both apparently know what the process is, so no need to press the point.

You and I do, but Adam apparently does not and that reinforces other
misconceptions on his part, so the detail is unfortunately necessary.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

On 26-Feb-12 15:49, Roland Perry wrote:
In message , at 14:30:31 on Sun, 26 Feb
2012, Stephen Sprunk remarked:

The pumps had a sign suggesting that Electron card users put in at least
GBP 20 worth or else a larger amount of the balance on the associated
account would remain earmarked for a few days.

Sounds like they're authorizing the card for GBP 20, as discussed
elsewhere in this thread.

Not authorising, because that's "Electron" is a debit card on an account
which doesn't allow an overdraft. They will be deducting the £20
straight away, and allowing only up to £20 of fuel. If you buy less, it
sometimes takes a while for them to credit it you with the balance.

This may actually be an artifact of the authorization/posting separation
that you don't otherwise see.

It sounds like the pump is authorizing the card for GBP 20, so the
issuing bank puts a "hold" on GBP 20 in the account, reducing the
"available" but not "posted" balance. The bank may list this as a
"pending" transaction.

Then, at some point later, the transaction is actually posted by the
merchant, say for GBP 15, referencing the prior authorization for GBP
20. The "hold" for GBP 20 is removed and a debit of GBP 15 is posted to
your account.

It's possible that your bank records this scenario as two separate
transactions (a GBP 20 debit and a GBP 5 credit), but that's not how
it's "supposed" to work.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

On 27-Feb-12 14:45, Adam H. Kerman wrote:
Stephen Sprunk wrote:
On 27-Feb-12 11:38, Adam H. Kerman wrote:
Stephen Sprunk wrote:
(Debit card transactions are _not_ removed immediately in the event of a
dispute, which is a significant difference.)

The debit has already occurred, so procedures with credit cards are
irrelevant. A chargeback by the clearinghouse to the merchant's account
isn't possible. The amount must be refunded.

Wrong. The dispute and chargeback procedures involving the issuing
bank, the card network, the card processor and the merchant are all
identical regardless of what class of payment card is used.

You just made something up. I'm still calling it a refund, and not a
chargeback, to distinguish between the merchant receiving payment in
advance of when the cardholder pays his bill, and the merchant receiving
money from the cardholder's bank account.

The merchant _never_ receives money from the cardholder's bank account.

When a purchase is posted, the card processor credits the merchant's
account and debits the network's account, the network credits the card
processor's account and debits the issuing bank's account, and the
issuing bank credits the network's account and debits the customer's
account. NO ACTUAL MONEY CHANGES HANDS at that time.

A chargeback results in reversing some or all of that transaction, i.e.
removing those credits and debits.

So the refund must come from the merchant's bank account, not by
applying to future receipts he anticipates from credit transactions.

A refund is an entirely separate transaction for a negative amount, not
a reversal of the original transaction. The card processor debits the
merchant's account and credits the network's account, the network debits
the card processor's account and credits the issuing bank's account, and
the issuing bank debits the network's account and credits the customer's
account. NO ACTUAL MONEY CHANGES HANDS at that time.

Eventually, all the accounts are settled by moving the _net_ amount due
from one party to the other. Note that this may happen at a different
time for each set of accounts, and is handled in the aggregate involving
hundreds to millions of transactions at a time.

It's somewhat comparable to what happens when a check is processed for
the wrong amount.

I'm not familiar with exactly how that works, but I suspect it's similar
to a chargeback, not a refund, since the original transaction was
recorded incorrectly.

You're still wrong about why the reversal doesn't occur immediately:
Again, it's because the merchant receive monies directly from the purchaser.
The merchant's bank account has some protection, too: Can't just be
debited by third parties.

In credit card transactions, the merchant has received payment on credit,
not directly from the purchaser. That's why it's different.

It is you that doesn't understand how this works--and you won't let
pesky little details like facts get in your way, as usual.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking

Stephen Sprunk wrote:
On 27-Feb-12 14:45, Adam H. Kerman wrote:
Stephen Sprunk wrote:
On 27-Feb-12 11:38, Adam H. Kerman wrote:
Stephen Sprunk wrote:

(Debit card transactions are _not_ removed immediately in the event of a
dispute, which is a significant difference.)

The debit has already occurred, so procedures with credit cards are
irrelevant. A chargeback by the clearinghouse to the merchant's account
isn't possible. The amount must be refunded.

Wrong. The dispute and chargeback procedures involving the issuing
bank, the card network, the card processor and the merchant are all
identical regardless of what class of payment card is used.

You just made something up. I'm still calling it a refund, and not a
chargeback, to distinguish between the merchant receiving payment in
advance of when the cardholder pays his bill, and the merchant receiving
money from the cardholder's bank account.

The merchant _never_ receives money from the cardholder's bank account.

When a purchase is posted, the card processor credits the merchant's
account and debits the network's account, the network credits the card
processor's account and debits the issuing bank's account, and the
issuing bank credits the network's account and debits the customer's
account. NO ACTUAL MONEY CHANGES HANDS at that time.

Yes, that's actual money changing hands.

The rest of your followup has been charged back, but I don't stand
much of a chance of getting a refund for my time.

Stephen Sprunk wrote:
On 28-Feb-12 01:37, Roland Perry wrote:
on Mon, 27 Feb 2012, Stephen Sprunk remarked:

If the card company finds in favour of the consumer, I'm sure the
merchant doesn't get paid,

The merchant was _already_ paid, so if the dispute is resolved in favor
of the consumer _and_ the merchant is liable for the fraud, the
merchant's account is charged back.

It's not always a fraud. Chargebacks can arise because an item is "lost
in the mail".

If the goods are "lost in the mail", that is not fraud (since fraud
requires intent), but it is the merchant's responsibility* to cure that
defect. If they do not, it becomes fraud. . . .

Uh, given that the merchant shipped the goods, there's no fraud here if
the merchant questions his responsibility to fulfill the order again.
That's a contract dispute.

Stephen Sprunk wrote:
On 28-Feb-12 12:39, Roland Perry wrote:

We both apparently know what the process is, so no need to press the point.

You and I do, but Adam apparently does not and that reinforces other
misconceptions on his part, so the detail is unfortunately necessary.

Earth to Stephen: Your followup here was not to one of my articles. This is
your typical behavior in which you argue and argue and argue without
actually disagreeing with someone, then offer a weak explanation for
why you behave in this bizarre manner.

Doncha love Usenet?

Stephen Sprunk wrote:
On 27-Feb-12 14:50, Adam H. Kerman wrote:
Roland Perry wrote:
Stephen Sprunk remarked:

Note that failure of the consumer to pay their credit card bill does
_not_ result in a chargeback, contrary to Adam's ridiculous claims.

Indeed, as long as the failure to pay was "because I have no money",
rather than "because I dispute the charge".

When a customer disputes a credit card or charge card transaction, it is
removed from their bill until the matter is resolved, so it doesn't fit
the usual definition of "unpaid".

Nor is it "paid". If the card company finds in favour of the consumer,
I'm sure the merchant doesn't get paid, whether the transaction was
originally authorised or not.

If authorized, the merchant is paid if the dispute is due to third party
fraud.

The merchant always gets paid. However, if there is a dispute, the
merchant may or may not (depending on various factors) be charged back.

This is why you are so well beloved on Usenet, Stephen.

Chargeback=payment reversal. If the payment is reversed, the merchant
was not paid.

The rest has been cut with that large scissors they use in movies to
demonstrate comically that the buyer has no credit.