My Credit Card Just Saved Me $1,098 - and a Big Headache
Take last month, for example. In a fit of pre-winter remodeling, I decided to replace our home's el-cheapo, contractor-grade front door with a spiffy model with geometric windows, beveled glass -- the works. But being a cheapskate, I didn't want to pay retail prices. So, I did a quick search for "door depot."
(Pro tip: Lawyers notwithstanding, the "depot" concept of bargain-shopping has gone as generic as Kleenex. Nowadays, there's a website out there offering discount prices on just about any item you've ever considered buying. Home Depot (HD), of course. Used car depot. Battery depot. And yes, a door depot, too).
That last search led me to a discount door wholesaler halfway across the country. I ordered a pretty door for the family castle and put the door -- $999 plus $99 for delivery from Texas -- on my card.
A week after placing my order, the door still hadn't arrived. Calling customer service, I discovered that the record of my order had been misplaced -- so would I like to place the order again?
I did. A week later, the door arrived by truck -- 300 pounds of glass and steel, caged within a wood frame -- and we got it installed without a hitch. Then came the hitch.
Thank You, Sir. May I Have Another?
Several days later, Roadrunner Transportation (RRTS) called and asked when I would like my door delivered. As I would later discover, my first door order hadn't been lost -- my name had been misspelled. And this misspelled order was now en route to me (despite it having been placed prior to the reorder).
I rushed to check my credit card statement. Sure enough, I found two bills -- for two doors at $1,098 each.
When One Door Closes...
After querulous emails sent to the door vendor went unanswered, I recalled that scattered among the fine print on the pound of paper that JPMorgan Chase (JPM) sent me when I received my credit card was mention of a billing dispute procedure. Turned out, this was easy as pie.
One call to Chase got me a customer service representative who listened to my description of what happened and explained what would happen next:
- Chase would immediately reverse the second $1,098 charge. "You don't have to pay that," said the rep.
- Within a week, a letter would arrive by mail requesting me to provide a written description of what happened, including the status of the item purchased (Was it already returned or canceled? Did the vendor accept the return or issue a refund yet?) and the reason for the return or cancellation.
- I'd also need to submit "a copy of a sales slip, credit slip, return receipt or any other documents supporting your dispute."
All's Well That Ends Well
Needless to say, this was all very reassuring, as I was pretty sure it was the vendor that was in the wrong. But what happened was even better. No sooner had I notified Chase of my dispute and seen my charge reversed, then the vendor called and agreed to refund the $1,098 of its own accord and cancel the duplicate order.
Amazingly, vendors seem to pay more attention to billing disputes when you've got a $211 billion market-cap company fighting on your side.
No Good Deed Goes Unpunished
While using a credit card helped me to save $1,098 (and having to figure out what to do with one more front door than I have houses), not all billing dispute stories have such happy endings.
In a recent column, Bloomberg Businessweek noted unscrupulous consumers are using the billing dispute or chargeback procedure for fraud. In this scenario, a consumer may order an item online, receive it on time, but then lie and say the item never arrived -- or that she never ordered the item in the first place. The fraudster will then insist the vendor refund the purchase price, or failing that, hijack the billing dispute procedure to get money refunded if the vendor refuses.
Industry analysts warn that fraud of this sort is costing retailers billions already. And Businessweek laments that recent data breaches at retailers like Home Depot, by putting more credit card numbers in the hands of criminals, are turning fraudulent chargebacks into a growing problem. If this keeps up, it could be that the credit card perk that saved me $1,098 last month won't be around forever.
Happy (almost) Halloween! Got a similar online shopping horror story to share? Tell us about it below.
Motley Fool contributor Rich Smith today has one house, (thankfully only) one front door and no position in any stocks mentioned. The Motley Fool recommends Home Depot and owns shares of JPMorgan Chase. To read about our favorite high-yielding dividend stocks for any investor, free of charge, check out our analysts' report.