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#2255884 - 06/24/21 12:57 PM Transfer of Charge to Customer-Reg E
Jenny Roberts Offline
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Joined: Feb 2014
Posts: 162
Tennessee
If a customer calls the bank and says that they authorized a purchase but either didn't receive the merchandise or it was damaged or etc., we send in a dispute to the card service as a courtesy to the customer. There is a charge for each transaction that is submitted. Are we okay to transfer this charge to the customer?

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#2255886 - 06/24/21 01:17 PM Re: Transfer of Charge to Customer-Reg E Jenny Roberts
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,672
Galveston, TX
What does your debit card agreement say? If this is a fee you are paying a third party processor - probably not.
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#2255889 - 06/24/21 01:44 PM Re: Transfer of Charge to Customer-Reg E rlcarey
Jenny Roberts Offline
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Joined: Feb 2014
Posts: 162
Tennessee
I don't see where we have in the agreement that any charges can be transferred. Do you think it is better to add the verbiage & then dispute the transaction on behalf of the customer or it is better to leave the verbiage alone & not dispute the transaction on behalf of the customer at all? What do you see other banks doing?

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#2255891 - 06/24/21 02:14 PM Re: Transfer of Charge to Customer-Reg E Jenny Roberts
Valley girl Offline
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Joined: Aug 2014
Posts: 342
TX
We dispute the item and do not pass on any fees as long as it is over $50 (the cost to dispute from our processor is approximately $40). The member has to provide copies (or in the case of telephone calls, notes) of their attempts to work with the merchant to resolve the issue - this is a Visa requirement, so we do not submit the dispute without all of the required evidence. We don't give credit until we receive final credit from the merchant or we provide the merchant explanation on why it can't be credited such as merchant provided replacement item, or store credit or whatever the resolution was. During 2020, our merchant disputes were taking 3 to 4 months to work their way through the dispute system, so it is a very slow process. When I do a merchant dispute, I always call the member and explain how long the process may take and to please contact us if the merchant makes it right during the process.

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#2255893 - 06/24/21 02:27 PM Re: Transfer of Charge to Customer-Reg E Valley girl
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 162
Tennessee
Valley Girl, thank you for the info! Do you state your fee in your agreement?

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#2255895 - 06/24/21 02:45 PM Re: Transfer of Charge to Customer-Reg E Jenny Roberts
burkemi Offline
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Joined: Nov 2013
Posts: 522
As I understand her post, they don't charge a fee. Neither do we.

Merchandise Not Received, damaged product, etc are not covered by Reg E, but are covered under Visa. I can only assume the same is true for MC. So your statement about not disputing at all would be counter to Visa rules.

As far as charging a fee, Reg E does allow a fee as long as it does not have a "chilling effect" on your customers. What cost actually crosses the chilling effect threshold is not defined, so tread carefully.
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#2255896 - 06/24/21 03:00 PM Re: Transfer of Charge to Customer-Reg E Jenny Roberts
Valley girl Offline
Gold Star
Joined: Aug 2014
Posts: 342
TX
Thank you Burkemi! No, we don't charge a fee, and yes, Visa requires that we assist the member with merchant disputes.

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#2255913 - 06/24/21 05:48 PM Re: Transfer of Charge to Customer-Reg E Valley girl
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 162
Tennessee
Thank you everyone! I misread the comment earlier about the fee.

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#2255944 - 06/25/21 02:05 PM Re: Transfer of Charge to Customer-Reg E Jenny Roberts
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,327
Illinois
Your contract with VIsa or MasterCard will prohibit the passing along of chargeback fees to the cardholder. This is the cost of doing business to issue their cards. Banks are compensated for issuing their cards through the interchange fees you receive for each purchase made using cards you issued.
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