Visa/Mastercard: Returns & ripoffs

[Sagebrush]

All,

I read a lot of complaints on the forum about returns to vendors. I think its appropriate to let you know something of the other side of the issue.

VISA/MC charge merchants a fee of between 2-6% on all transactions. If you read the papers, you know that there has been a lot of complaints by merchants about new fees. Consumers have similar issues and there are bills before congress to stop the credit card industry from piling on these new fees. Recently Senator Dick Durban introduced a bill into the senate. You should consider supporting it for the following reasons.

If you make a purchase from me, I pay a fee to Visa/MC. What you may not be aware of is, if you return the item, that fee is not refunded. Recently Visa/MC has added a new gimmick which is a form of highway robbery. On top of the fee for purchase they have added a fee for returns, a reprocessing fee. In short, Vendors pay twice for returns.

Normally these fees can be avoided by simply "authorizing" the card. Authorizations are not charges and they automatically go away in 10 days. We have a 5 day return policy, so if the policy is adhered to, no problem. If the item is not returned After 5 days we "force" the sale. We will not accept returns later than 5 days and that is the reason. Hope you all understand.

 

[Fly Girl]

Richard, thank you for the information. I generally pay merchants for my gemstones using PayPal. I''m wondering if this is because the fees are lower. Would this be a better option for you? Can you comment on this?

 

[chictomato]

Yeah me too. I usually pay via paypal. They have fantastic customer service. I will just ring up paypal office whenever there is any occasional hiccups which rarely occurs. I get back every single cent in a refund!

 

[movie zombie]

great info, Richard!

mz

 

[Jim Rentfrow]

While Paypal can be a good fit for online vendors it is very hard to do business in a brick and mortar with Paypal. I am pretty sure they also charge fees for refunds when you a merchant with them as well however. I will read through my merchant agreement with them and find out.

 

[Arcadian]

Jim there's a merchant fee with a merchant account (I have one) with which you can accept visa/mc with paypal no problem. I think the fee is like 3% or something like that.

It really bites what the cc co's are doing. That loophole on the business side really needs to be closed asap.

-A

 

[Sagebrush]

All,

Paypal, I will look into that. I don''t know what the return policy is on Paypal. If anyone has that information I would be grateful.

Durbin''s amendment #3989 has to do with debit cards. http://durbin.senate.gov/issues/leg_wallstreet_swipe.cfm. Credit card companies are in the process of taking over all our transactions. I am sure many of you have been hit with exorbitant fees, absurd late charges and so forth. Contracts that merchants sign give these companies a license to steal and eventually we all pay!

 

[lelser]

Paypal charges more for a transaction than if you take Visa/MC but they don''t have a monthly fee. They also will (generally) refund fees charged on a return. I''ve made the decision not to take credit cards directly, which might cost me a few sales, but it saves me quite a lot of money in monthly fees that would otherwise have to get built into the costs.

 

[Sagebrush]

Lisa,

With Paypal, my information is that the seller pays a fee on sale and the buyer takes the hit on a refund. So there is a fee both ways. The seller''s fee is higher on sale than a normal credit card transaction, but given the new fees that may no longer be true.

Durban''s bill, while useful, is also full of holes. It only deals with debit cards and says nothing about transaction fees on credit purchases. It also exempts banks with assets under 10M. What is to stop MC/Visa issuers from morphing into a series of smaller subsidiaries to avoid the fees, the banks win and Durban gets to look like a hero. Everyone wins but the consumer.

 

[VapidLapid]

The cash economy is my preferred.
If offered I would accept payment in gold
If I were a seller
We are now so spoiled though by purchasing things on the inertnet and having them shipped out the next morning. I doubt many people could stand the wait if we all mailed checks to vendors, and waited for them to clear before purchases would ship. Then back again if an item was to be returned. Wait til next year when all merchants paypal receipts will be 1099ed. When cash money is declared illegal....note to self: start hoarding cowrie shells.

 

[Sagebrush]

Vapid,

I can see you are my kinda guy (or gal). Gold accepted here.

Best,

Richard

 

[morecarats]

Credit card fees are part of doing business in any retail trade. The banks offer a service to merchants and they charge a fee for doing it. A gemstone dealer doesn''t have to accept credit cards; he can require his customers to pay in cash or bank wire transfer. Credit card payment is offered for the convenience and protection of consumers. To see a dealer whine about credit card fees on a consumer forum is somewhat embarrassing. Perhaps the problem is an unusually high rate of returns, which may indicate other problems. Perhaps giving customers an inspection period longer than 5 days might give the customer more time to solicit other opinions on the stone and make a considered decision on the purchase.

From a consumer point of view, making your purchase with a credit card provides a significant measure of protection in case of any dispute with the dealer. Most consumers understand that the merchant factors in credit card fees in setting the price on his goods, so the consumer is paying for the extra protection.

Undoubtedly the banks would gouge both credit card customers and merchants if given half a chance. The reality is that the credit card business is highly competitive and has an astonishingly high rate of fraud. It''s not a business I''d want to be in.

 

[PrecisionGem]

Richard, here''s how paypal works.

For sales in the US, there is a a 2.9% fee plus a transaction fee of $.30. For outside the US it is 4.0%
If the refund is made within 30 days, then Paypal refunds you the seller the fee. The customer is not charged any fee.

 

[iLander]

My experience with Paypal was different, IF I remember right. I wanted to refund a customer $115 (for some stuff I sold on ebay), but when I finished the transaction, she ended up only getting $112. I thought it was Paypal that took their transaction fee out of her cash. I didn''t have to pay the transaction fee, she did. I wish I had known that they were going to do that, it didn''t show up until after I clicked the finalize button, I wanted to give her the whole $115. She didn''t care, but it irked me.

Their spreadsheets confuse me, so I''m not really sure what went on.

As a customer, if I know up front that I will be charged a "restocking" fee (that covers these annoying charges for the seller), I have no problem with that.

I agree with the overall intent of this thread: the credit card companies are WAY out of hand.

I think it''s amazing the pile of money they make with no risk (the issuing bank takes the credit risk).

 

[Sagebrush]

Gene,

My understanding is that Paypal does collect a return fee from the buyer. Perhaps I am wrong.

Best,

 

[Sagebrush]

Morecarats,

Credit cards are part of doing business, that is true. Credit card companies deal with fraud, they also are very profitable. However, the charging of exorbitant fees on returns simply increases the cost of doing business. Objecting to rip-offs is not whining and I resent your remark.

I recently ran a credit of 50k. The circumstances had nothing at all to do with the quality of the product, without recounting the details, I was not obligated to do it, it was a case of hardship. The client agreed to pay the 2% but with new fees and a charge for the credit it came to 5%. 5%, you call that fair? You will recall that credit card companies are constantly touting their buyer protection. However, their so-called protection involves a profit, for themselves.

There are two sides to each transaction. The buyer is no better, no more deserving of consideration than the seller. We also deal with fraud. How long should I allow a client to deliberate? 5 days, 10, a month, a year? I bought, paid for and own the item in question. Recently I accepted a return and sold the item within two hours what if the client took two weeks? You can''t decide in 5 days, tough, stop whining.

 

[lelser]

Date: 6/12/2010 10:49:00 AM
Author: Richard W. Wise
Gene,


My understanding is that Paypal does collect a return fee from the buyer. Perhaps I am wrong.


Best,

They never have from my clients. Maybe they have different policies for personal versus merchant accounts?

Cheers,

Lisa

 

[dzop]

I agree with morecarats. While I''m aware that credit card fees are non-trivial, I assume they''re priced into the cost of the stone. Many dealers of expensive goods have different prices for cash versus credit, either formally or informally. That''s a more reasonable way to handle the situation than a highly restrictive return period, especially for a good that can have a five-figure price.

I know that a 5-day return period would make me very hesitant to buy an expensive stone from that vendor. Just my $0.02. There are better ways to handle this.

Date: 6/12/2010 2:44:21 AM
Author: morecarats
Credit card fees are part of doing business in any retail trade. The banks offer a service to merchants and they charge a fee for doing it. A gemstone dealer doesn''t have to accept credit cards; he can require his customers to pay in cash or bank wire transfer. Credit card payment is offered for the convenience and protection of consumers. To see a dealer whine about credit card fees on a consumer forum is somewhat embarrassing. Perhaps the problem is an unusually high rate of returns, which may indicate other problems. Perhaps giving customers an inspection period longer than 5 days might give the customer more time to solicit other opinions on the stone and make a considered decision on the purchase.


From a consumer point of view, making your purchase with a credit card provides a significant measure of protection in case of any dispute with the dealer. Most consumers understand that the merchant factors in credit card fees in setting the price on his goods, so the consumer is paying for the extra protection.


Undoubtedly the banks would gouge both credit card customers and merchants if given half a chance. The reality is that the credit card business is highly competitive and has an astonishingly high rate of fraud. It''s not a business I''d want to be in.

 

[lelser]

Date: 6/12/2010 2:44:21 AM
Author: morecarats
To see a dealer whine about credit card fees on a consumer forum is somewhat embarrassing. ...

Undoubtedly the banks would gouge both credit card customers and merchants if given half a chance. The reality is that the credit card business is highly competitive and has an astonishingly high rate of fraud. It''s not a business I''d want to be in.

Morecarats this is uncalled for. If people are wondering why returns seem to be expensive, it''s not at all whining to explain why that is.

Banks DO gouge on both side and they certainly have been given more than half a chance. If I did more retail business I''d probably take credit cards but I sell to goldsmiths primarily and they pay by check. Taking CCs would mean increasing my prices since I''d be paying the base charges as well as the transaction fees.

 

[Sagebrush]

Dzop,

same question, how much time is enough time for you to hold someone''s property and make a decision?

I think this is a good question particularly for this forum, I would love to hear member''s honest views. I think it would be useful to vendors.

 

[T L]

Date: 6/12/2010 12:38:40 PM
Author: Richard W. Wise
Dzop,


same question, how much time is enough time for you to hold someone''s property and make a decision?


I think this is a good question particularly for this forum, I would love to hear member''s honest views. I think it would be useful to vendors.

When I have an item from a vendor that I''m unsure about, usually three days tops. I like to check it out in different lighting and ask the forum for advice, as I did with an asscher spessartite I was on the fence about. If I open the box and immediately don''t like it, I will send it back asap. I don''t want to hold onto a stone that the vendor can try selling to someone else, or potentially damage it while I am in the review period.

I actually once opened a box I got from the post office, took it outside, inside, and returned it to the post office the same day. If I don''t like something, I don''t mess around, as I know it wastes the vendor''s time, and I would like a prompt refund.

I do realize some people are not as decisive, and need more time though. Some vendors are willing to accommodate those buyers as long as they are good customers.

 

[Sagebrush]

Tourmaline lover,

Bravo!

There certainly can be extenuating circumstances, I try to be flexible, but waiting for a client's Guru to determine if Jupiter's moon is in the correct phase somehow doesn't work for me.

That's a joke, I say, that's a joke, son!

 

[dzop]

My experience with somewhat analogous things (art, antiques) is that a week is standard from a retail store. If you want to buy without the protection of a real return policy, you can always buy at auctions and snip the dealer premium out of the equation. Most retail dealers charge a substantial markup from auction prices- 50 to 100%, IIRC, and that markup covers the dealer's "eye", a guarantee of authenticity, and, yes, a period of time to get comfortable with your purchase.

The problem with a 5 day period it that it is highly restrictive on getting a third-party appraisal, particularly if weekends or holidays enter into the equation. And as a guy based out of the Berkshires, you should know that you don't always get a bright sunny day (or a cloudy one) within a 5 day period.

For a $500 tourmaline, sure, 5 days is plenty. But for a $20k sapphire....really? 5 days?

Date: 6/12/2010 12:38:40 PM
Author: Richard W. Wise
Dzop,


same question, how much time is enough time for you to hold someone's property and make a decision?


I think this is a good question particularly for this forum, I would love to hear member's honest views. I think it would be useful to vendors.

 

[VapidLapid]

I am naturally very mistrustful of powerful conglomerates that process nearly all of the transactions of the people. 3% of the formerly cash and carry economy. I have one antique tool dealer in Massachusetts who I buy from regularly. I send him cash. In the mail. I''ve never met him but I''ve bought from him for years.
If a gem vendor sends me a stone, I think 5 days is more than sufficient to evaluate it and make a decision. The vendor has his capital tied up in that inventory item and If I am sending it back, but hold on to it for 2 weeks, that then is 2 weeks that it is not available to a potential client who might buy and keep it. If I were to hold the stone longer, I have the stone but the seller doesn''t actually have the money until I say I accept the stone. It is not like they can spend it right away and then say sorry cant refund you right now if I send it back. It is a professional courtesy for a vendor to send someone a stone for evaluation whether it be a $600 stone or a $6000 dollar one. It doesn''t take much to acknowledge that courtesy and return it in kind.

 

[T L]

Date: 6/12/2010 3:18:42 PM
Author: dzop
My experience with somewhat analogous things (art, antiques) is that a week is standard from a retail store. If you want to buy without the protection of a real return policy, you can always buy at auctions and snip the dealer premium out of the equation. Most retail dealers charge a substantial markup from auction prices- 50 to 100%, IIRC, and that markup covers the dealer's 'eye', a guarantee of authenticity, and, yes, a period of time to get comfortable with your purchase.


The problem with a 5 day period it that it is highly restrictive on getting a third-party appraisal, particularly if weekends or holidays enter into the equation. And as a guy based out of the Berkshires, you should know that you don't always get a bright sunny day (or a cloudy one) within a 5 day period.


For a $500 tourmaline, sure, 5 days is plenty. But for a $20k sapphire....really? 5 days?

Date: 6/12/2010 12:38:40 PM

Author: Richard W. Wise

Dzop,



same question, how much time is enough time for you to hold someone's property and make a decision?



I think this is a good question particularly for this forum, I would love to hear member's honest views. I think it would be useful to vendors.

Dzop,
If I were buying such a rare and expensive gem, I would require the Prestige report from the AGL with the full ratings for color, clarity, origin if applicable, treatments, and the whole nine yards. I would research the values as well based on the AGL analysis. The AGL is something I would request the vendor to obtain for me, and if he couldn't, I probably wouldn't buy the gem. The AGL report should be part of the sale price. The AGL would be non-refundable, unless the stone was greatly misrepresented, like it was synthetic, or diffused, etc. . . However, obtaining the report should not be part of the review period, and making payment would be based on the outcome of the AGL and then the review period would go into effect.

Unfortunately, I do not trust most (not all) appraisers since the stone can run the gamut of values, especially if there is no AGL Prestige report involved. That is the only report that identifies the quality of color, and appraisers are not very consistent as the AGL. Many also cannot identify some treatments since they require very expensive equipment. Some gems really do require a very complete and advanced laboratory analysis before buying. I would always do AGL since it also provides the quality of color and all treatment levels, VERY VERY important.

This is just me, but for me, that is something I would highly consider before shelling out thousands upon tens of thousands on a gem.

ETA: For diamonds and other colored diamonds, I would go with GIA, but the idea is the same.

For the record, if it were me, I would be very antsy keeping a very very expensive stone around for more than a week. I would want to return it right away if it didn't please me, but the AGL (or GIA if it's a diamond) would shed a great deal of light on the quality.

 

[Sagebrush]

Dzop,

You make a whole pile of assumptions here. When you buy from me you do, in fact, buy my eye. Are you getting something of value there? You decide! I make it a policy never to comment on threads asking opinions based upon images, that said, I sometimes have to bite my tongue when I see the aquarium gravel some people buy. Much of this awful retail markup I hear about ad nauseum is simply overhead. In the age of the internet we must be competitive. No one is getting rich, Dzop, most of us are making a living.

Given that auction prices reflect the price the willing buyer bids, the assumption that they are X percent over retail prices is simply incorrect. Auctions were ONCE the province of dealers, that is no longer true. The highest per carat prices paid for fancy color diamonds, ruby and sapphire and emerald are auction prices. At the current Christie''s auction several colored gems went for 3X the auction estimate. Check it out! Savvy buyers do well, the lambs are slaughtered.

 

[CharmyPoo]

Paypal doesn''t usually charge the consumer / sender on sending the money or returning the money. The exception is if money is sent as gift and they have the option to pay the fees. Payments made by credit cards also suffer a very poor exchange rate provided by paypal.

 

[Barrett]

5 days is plenty..are you going to open your package and you will like of you won''t like it..what one day you don''t like it but magically the next day you will..thats gemstone bipolar disorder

..like TL mentioned the only real reason you would need longer than 5 days is to get a lab report but if you are buying from a reputable vendor/dealer then you really don''t need one especially on a stone $500 or less..now if you are spending 5K or 20K chances are they will have a report already..at least I would hope so
one day you don''t like it the next day you do then the next day you don''t..hehehe..would make a great politician or presidential candadite..always be flip fllopping on the issues

 

[iLander]

Date: 6/12/2010 2:44:21 AM
Author: morecarats
Credit card fees are part of doing business in any retail trade. The banks offer a service to merchants and they charge a fee for doing it. A gemstone dealer doesn't have to accept credit cards; he can require his customers to pay in cash or bank wire transfer. Credit card payment is offered for the convenience and protection of consumers. To see a dealer whine about credit card fees on a consumer forum is somewhat embarrassing. Perhaps the problem is an unusually high rate of returns, which may indicate other problems. Perhaps giving customers an inspection period longer than 5 days might give the customer more time to solicit other opinions on the stone and make a considered decision on the purchase.


From a consumer point of view, making your purchase with a credit card provides a significant measure of protection in case of any dispute with the dealer. Most consumers understand that the merchant factors in credit card fees in setting the price on his goods, so the consumer is paying for the extra protection.


Undoubtedly the banks would gouge both credit card customers and merchants if given half a chance. The reality is that the credit card business is highly competitive and has an astonishingly high rate of fraud. It's not a business I'd want to be in.

Did you really just say that? Really? I seriously doubt that Richard has a "high rate of returns" or "other problems". Wow . . . (where's the "I'm embarrassed for you" emoticon?)

If Richard ever has a return, it's a buyer issue, not an issue with the stone.

I also think a return policy is matter of communication: if i'm buying a $20,000 stone, and I intend to get a cert., or other opinion, I will communicate that to the seller and we will come to a mutual agreement. We will write that agreement on the receipt and each keep a copy. Any sensible person would do that.

As far as fraud, the only credit card company at risk is American Express, because they hold the debt themselves. Visa and Mastercard do not hold debt, that debt is owned by the bank that issues the card (read the front of your Visa). Ultimately, the banks do not cover the debt either, they buy insurance to cover it and pay a small percentage on each deadbeat dollar. The credit card business is not actually very competitive, with only 3 big brands out there (I'm not counting the fading Discover card brand) and for Visa and Mastercard, it's a profit machine. They are printing money, because they have a percentage of EVERY SINGLE TRANSACTION all over the United States and most of Europe. And they are doing almost nothing for it.

Frankly, if someone returned a $50,000 item to me and I had to pay a 5% fee for nothing, I'd be pretty pissed. I think you would be too.

 

[T L]

Date: 6/12/2010 5:32:52 PM
Author: amethystguy
5 days is plenty..are you going to open your package and you will like of you won't like it..what one day you don't like it but magically the next day you will..thats gemstone bipolar disorder

..like TL mentioned the only real reason you would need longer than 5 days is to get a lab report but if you are buying from a reputable vendor/dealer then you really don't need one especially on a stone $500 or less..now if you are spending 5K or 20K chances are they will have a report already..at least I would hope so

one day you don't like it the next day you do then the next day you don't..hehehe..would make a great politician or presidential candadite..always be flip fllopping on the issues

I personally would want the lab report to be obtained by the vendor. If I obtain it on my own, then I am responsible for the gem to and from it's transit from the lab, and it's also in my hands, which means that's part of my review period. If the seller gets a lab report, it is in his hands, and I don't buy the gem until the lab report comes back with reasonable expectations. I pay for the lab report so this is not the seller's responsibility. I think it's reasonable to ask a seller to obtain a lab report on an expensive gem, or one that has a great deal of treatment and synthesis like sapphire for example. If the seller knows I'm willing to pay for the expensive lab report, then he knows I'm probably serious about purchasing the gem. I consider this an "item on hold" period, but since no money changes hands yet for the gem, no credit card fees are in question at this time.