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RE: Grapevine and Drs. FosterandSmith

Chung Chow wrote:
>Date: Sat, 9 Mar 2002 23:48:39 -0800
>From: "Chung Chow (Annex)" <cychow at exc1_annex.com>
>Subject: RE: Grapevine and Drs. FosterandSmith
>Unfortunately the "it might not be possible to cancel the order cause
it's >already invoiced" is a valid thing.  It would be cheaper to have
you refuse the >order and then credit you back the money later.  This
happens because:
>1.  Their whole invoicing system is wacked.  They may still be
>    on paper invoicing (Which is stupid, they should have it
>    both on paper and computer) and getting someone to go through
>    thousands of invoices will cost a lot more money.
>2.  This is more likely. They ran out of stock on the item and 
>    they ordered it from their distributor and either had it
>    sent directly to you or they'll just funnel it right back 
>    in the shipping department right when it comes in to get
>    it out to you faster and cause less paper work.

I'm not so sure what their reasons for not sending it were, but unless
the law has changed this may be illegal.  And if this is a common
practice they could get into a lot of trouble.  If they are drop
shipping to you then what follows may not apply.  What follows is my
recollection and is probably not accurate and even if it is the law may
have changed.  I am not an attorney and this might be incorrect.  It
would be great if an attorney on the list would be kind enough to
enlighten us.  Or perhaps someone in the credit card department at a
bank could help explain consumer rights in mail order/internet credit
card transactions. 

I used to run an auto parts manufacturing company and we did the vast
majority of our business via mail order, much of it with credit cards.
I had to talk to the VISA merchant rep at my bank about another matter.
She asked how things were going, wondering if I was having any problems
or anything she could help me with, when we started discussing consumer
rights under the Uniform Commercial Code (UCC).  I was concerned because
we were running charges through VISA for one of our products that sold
for several thousand dollars and had to be custom built.  I had heard
that if one of my customers were dissatisfied with the product he/she
could return the item after using it for up to 6 months and get a full
refund.  During the course of our conversation I mentioned that we had
(every now and then) run a VISA charge without shipping another product
we made on the same day.  We made parts customized for the customer's
application.  We could make most of the product without unalterable
modifications but as we were a small business we wanted to be sure we
would get paid for each and every part we put together.  So generally we
would run the charge (call it in) on product we expected to get out the
door that day.  We had been doing it for several years so we had a real
good idea what we could get done.  But occasionally UPS or FedEx would
show up early or we would take an unusually large number of customer
calls and we would not be able to get the modifications complete in time
to package and ship.  In every case it would go out the next day.  Well,
when I said this she about came unglued and I was just about read the
riot act.  You would think I had just shot someone or tried to rob her
bank.  She told me that it was NEVER to happen again.  It's been a while
so my memory is a little shaky but I seem to recall that she said it
violates the UCC and that I could lose my VISA merchant account if
anyone ever complained.  I also seem to recall that I heard the words
fraud and felony too.  I got the impression that it would also make VISA
and everyone between me and them (like my bank) liable and that they
would be more than happy to make me the designated jail goer/financially
responsible party for any and all problems I created.  With all the
trouble I am having with everyday life (my cup overfloweth with things
to do is a gross understatement), I feel lucky to remember what I had
for breakfast let alone something that occurred 15 years ago.  I very
well could be wrong about this but I recall being very anxious on my
drive back to the office about criminal prosecution, jail time and
serious fines, all for an inadvertent scheduling error.  Again, is there
an attorney out there with the correct information about this?

I'm sure things have changed since then (15 years ago), but maybe not.
Perhaps an attorney on the list would provide the rules regarding this
aspect of mail order and/or on-line credit card purchases (PLEASE?).  I
know this does not seem like much but if you think about it when you
make a mail order or internet purchase, the merchant has promised to
provide you with product in a reasonable time and taken your money
(perhaps before they were supposed to).  If they have run the charge, it
is in their bank account or soon will be.  In either case, once they
call it in or electronically process the charge, you no longer have
access to that portion of the credit available on your card and your
credit card company will soon expect the money.  In essence they have
your money and they are not following through on their end of the deal.
The VISA merchant officer at my bank explained that mail order (there
wasn't a vast commercial internet then) is supposed to work just as if
you were there:  they get your money (run the charge) the same day their
product or service leaves their control (i.e. you get it or it is in the
hands of a shipper en route to you).  Whether this still violates the
UCC or some other law, I do not know, but you would be amazed at the
rights the consumer has when using a credit card for mail order.  I
would assume that the rights are similar for the internet as well.  

The rules at that time were so biased in favor of the consumer that as I
was driving home from the bank that day I was also thinking very
seriously about not taking credit cards any more.  I would have except I
figured that it would have cost too much business.  We did stop
accepting that form of payment on the turbo kits we made.  There was
just not enough margin in them (too labor intensive) that we could not
absorb more than a few returns like this and stay in that business
(pretty low volume stuff).  My bank's VISA merchant officer told me my
customer could use one of my turbo kits for six months then uninstall it
and get a full refund regardless of the condition of the returned parts.
This was true even if he had abused it to the point that it was not
functioning properly or even completely broken.  And I would not have
much of a say in it as they (the bank and/or VISA) would simply take the
money from my account.  Becoming a credit card merchant gave them the

Even before learning this, I already went way beyond bending over
backwards to make my customers happy.  Not just because I wanted to
treat them the way I would want to be treated but also because I had
read some things about word of mouth advertising.  A happy customer will
tell his friends what a great experience he had with you but usually
only if asked.  If it is exceptional, he might voluntarily tell 5-7
friends.  An unhappy one will make a point of telling at least 10
friends what a bum you are as soon as he can and won't hesitate to
repeat it if the chance ever arises again, even if what you do was not
part of the discussion.  After learning this, I always kept this in mind
when handling a customer complaint.  I made myself and my employees
think that perhaps our perception of the circumstances was wrong and
that we should always try to see it from the customer's point of view.
I learned there are some who will never be happy no matter what you do -
even if you gave them the product for free.  I also learned most people
are pretty honest and will be fair, particularly if they think you are
trying to be fair too.

Sorry, I know this is a little off topic and ListMom I promise not to
ramble on again off topic.  But if a lot of us are buying over the
internet (I know I am) it would be better for every one of us to know
the rules.  Some have recently mentioned unsatisfactory dealings and
others have noted some circumstances that might concern a few of us.  It
might be nice if someone who actually knows the law would provide a
little guidance here.  Not so that the system could be abused (I have
been subscribing for quite some time and it seems that most everyone
here is pretty reasonable and very helpful) but so that we know our
rights under the law when we get jerked around by an unscrupulous
vendor.  It also would be nice to know how to handle the transaction in
order to minimize the possibility (a lot of the time I call to check
inventory and order over the phone, using the internet mainly for
product information) and/or make the remedy as easily obtained as
possible.  IMO, fewer problems yield a better experience.  Isn't a
better experience the purpose of the list?

Speaking of a better experience, thanks again to all of you who have
provided me with so much wonderful information.  I think I would have
spent years at this before even coming close to what I have gained from
your collective wisdom this past year.