Need advice re: being charged almost $1000 to RETURN!

[Bella432]

OK, since I didn't know where else to turn other than a board full of people who could tell me yes this is how it works, or no you're getting ripped off.. I have a quick question I'm hoping you all can help me out on. I very recently added to my diamond collection and bought a modern cut stone from the US, off ebay, with my mastercard (not through paypal as paypal won't allow a transaction over $10,000, but this was a company I could call who accepts mastercard). I got an email this morning, before I've received the stone, but after I've been charged and the stone has been sent.. the seller said, "I also wanted to let you know that because this is a international transaction and you wanted to pay with your master card. It has cost me $537.84 in transaction fees. I will incur this cost. However is you decide not to keep the diamond it will cost an additional $184.00 to process the refund. So I will have to charge you a total of $ 822.74 as to cover the expense of taking the master card. So I really hope you love the stone as I do not want to charge you these amounts and I can not take a $822.74 loss. I prefer to take paypal as they refund all processing fees when you issue a refund."

How does it work if I pay for a stone from you with my credit card, and decide to return it? In my thinking, wouldn't you do a refund on mastercard, and mastercard would reverse that fee that they charged him as the seller to use their company for the transaction? Ugh I couldn't even pay by paypal if I'd wanted, because paypal requires 1 transaction for the buyer to be covered, but I know mastercard does cover me if it goes missing etc.

If you all can give me any guidance on this that would be incredibly helpful, as I've never sold anything I have no clue but this seems ridiculous that I'd end up paying $822.74 PLUS return shipping on a stone I didn't like, without this being mentioned before I purchased! (Thankfully all of our conversations have been through ebay incase this gets sticky)

 

[ame]

I would immediately cancel the transaction before it's processed and don't buy from this seller. Just say that their new terms that were not posted up front are not acceptable, cancel the transaction and you will not allow any fees or charges. And honestly, it sounds like you need to not buy something of this value on ebay if you're not going to buy through paypal. Because you're going to run into stuff like this a lot from people who are going to take advantage of the situation you're in and the inconvenience it puts them in as well.

 

[WillyDiamond]

Agree with Ame, cancel CC transaction.

 

[Bella432]

It's unfortunately already been processed, on Friday, and should arrive today (customs issues going across the US Canadian border). I figure at this point all I can do is wait for it to show up and go from there.

 

[ame]

It's unfortunately already been processed, on Friday, and should arrive today (customs issues going across the US Canadian border). I figure at this point all I can do is wait for it to show up and go from there.

Sounds like you are SOL then.

 

[GemFever]

Yikes, that's crazy! Do you have reason to think you'll want to return? Hopefully you'll love it and want to keep it.

Hypothetically, if the seller is telling the truth... it would put a financial strain on the seller to accept a return. I wonder if there is any way to call the credit card company and see what they have to say about it.

 

[Dreamer_D]

I am veyr certain if a refund is posted through a cc then the cc refunds the buyer the fees they charged. Same on Paypal -- if I refund a transaction I am refunded my fees. I would call MC to confirm all this.

Sounds really scammy. Please tell me you bought through ebay even if you paid with cc?

 

[Dreamer_D]

On another note, a seller cannot change the terms of sale AFTER you have paid. That is not ok, and I think that telling you there is now an $850 restocking fee -- after you paid! -- is unethical and likely illegal. I think he is trying to manipulate you to keep the diamond. I would call my cc and I would call ebay and get the real deal. If the seller tries to withold the $850 then you can likely file a claim on your CC for a chargeback or something. But that is not allowed. You cannot change terms of sale like that. It is t he sellers responsibility to learn these details before selling to you so that they are not stuck holding additional fees they cannot afford. If he did not find it out in advance so that he could incluse those clauses in his terms of sale, then I think HE is stuck with the costs, not you, because you did not agree in advance.

 

[missy]

That doesn't sound right. Call your cc company and find out their policy.

ETA: who is the seller?

 

[Bella432]

Yep, bought through ebay, all conversations through ebay too, including this last email. First thing I'll do is call MC if I need to return, thank you all for the help. I think Ebay and MC will be on my side for this, because I got him to reiterate the return policy to me through ebay conversation before I purchased, and what he said matched what his listing said, and it didn't mention the huge fee. To me it's common sense that MC would refund him (the seller) the 5% fee or so if he did a refund. I'm pissed. I do also think he is trying to coerce me into keeping the stone as well. I'm wondering if I should just not accept the shipment from FedEx, but that might cause a whole other slew of problems.

 

[Christina...]

I'm not sure that there would be any benefit to not accepting the package since your cc has already been charged. I agree with the others though, that any fees imposed by the cc company will be reversed if or when the item is returned. I also agree that the terms of the agreement can NOT be changed after the sale. I wouldn't wait to contact your cc company either, I think that it's in your best interest to discuss with them the situation and see what they have to say, I would then contact the seller (through ebay) and let them know that you do NOT accept those terms and that you have spoken with the credit card company and are aware that the fee will be reversed therefore they will not be penalized in anyway for accepting a return. I suppose that it's possible that the seller just isn't fully aware of how the process works, and that once they realize that they will not be penalized they will be happy to work with you on a return should you decide to.

I'm interested in hearing how this all plays out so please keep us updated! Good Luck!

 

[bunnycat]

Calling your CC company doesn't have anything to do with whether you return an item or not as they are not the ones charging the seller fees. People that have a merchant account with a CC company are charged fees by their merchant bank who deals with their account.

It's been a very long time since I had a merchant account and never had a return that I dealt with. I am aware of Paypal refunding fees if you sell something that gets returned because I deal with Paypal all the time and of course, Paypal is definitely trying to encourage easy internet purchases. However, I did have an issue somewhat like this when I was buying several pairs of tango shoes. You tend to have to try quite a few on until you get a good 'fit" and so one lady I buy from now and then would send me "courtesy fit" pairs and basically fill a box with shoes, charge me for one pair and then readjust when I returned the ones that didn't work. She told me it was cheaper than trying to process returns for people to do this (assuming because if you have a merchant account, the bank is not nearly as forgiving as Paypal on returned items and fees and she wasn't able to get fees back). In other words, just because PP does it, doesn't mean a CC merchant who has clients will, but as I said, it's been years since I've had a merchant account and times may have changed.

I assume large companies roll this aspect in to their profit margins and so returns are no issue. A small time seller taking CC through his own merchant account may not be so lucky. Still, he was not aware and it was not part of the item description and if I were selling a really expensive item, this is something I'd want to know in advance.

 

[Dreamer_D]

I suppose in the end it matters little how he works this out with his bank. You did not agree before buying to these terms, so you are not held to them now after the fact.

 

[Christina...]

I suppose in the end it matters little how he works this out with his bank. You did not agree before buying to these terms, so you are not held to them now after the fact.

I agree and I think that the sooner you contact the seller and make them aware that you do not accept the new terms the better! I would not wait until after you've received the ring and decide to return to contest the change...better to address it up front IMO.

 

[bunnycat]

I do agree with y'all. As is said, if I took CC and were selling something crazy expensive, I'd want to CYA beforehand and he didn't. But I'm just saying he may actually not be lying, taking CC is actually a more complicated situation than you might imagine and I can easily envision a merchant bank not giving a rats about whether you get fees back if someone returns something. They definitely aren't PP (in my brief 1 year experience with having a merchant account). For all people may diss Paypal, they are actually fairly easy to deal with comparatively.

 

[Christina...]

So I decided to do a bit of googling to see if the vendor would in fact be charged fees for accepting a return and according to this, he would. Of course we all know that not everything that you read online is accurate, but this does make an argument in the sellers favor. It does NOT address the fact that he changed the terms after the purchase had been made though...

“What happens if customer makes a return?”

This is a great question, and small business owners ignorant to the answer lose a lot of money on returns.

The two pricing schemes a processor can use to assess fees to a merchant are called pass through or bundled. Pass through pricing is preferred, because as the name implies, actual interchange charges are passed directly to the merchant and the processor’s markup is applied separately. Just as importantly, merchants receive a partial interchange fee credit on returns. However, the refunded interchange is often less than the fee paid on the original transaction, and the processor’s markup is not recouped.

With a bundled pricing scheme a business doesn’t pay actual interchange. Instead, the processor bundles interchange costs and the markup into tiers called qualified, mid-qualified and non-qualified. Under a bundled model scheme the merchant does not *any* fee credit for refunds. Worst still, the merchant may be charged a discount fee a second time when the transaction is refunded.

So, business owners *always* lose money on returned transactions. They just lose less when their processor assesses fees on a pass through pricing scheme opposed to a bundled scheme.