One reason I use credit cards is for the peace of mind it provides…or so I thought. But when push came to shove, neither American Express or Chase had my back. Don’t assume that you will prevail in a dispute, even if you were ripped off by an unscrupulous merchant.
A bit of background. I’ve been a Chase customer for 19 years and an American Express customer for 15 years. Until recently, I have been a model customer. I always paid early or on time, carefully managed my credit, rarely disputed charges, and maintained a credit score over 840.
Background: Fleeced By A Merchant In Italy
My import/export company imports designer handbags from Italy. We entered into a large six-figure deal to purchase handbags. These would be imported to the United States and Canada then re-sold at a modest margin. Even with shipping costs and duties, buying from Europe made sense.
We work with merchants who accept credit card rather than require wire transfer because there are far too many unscrupulous actors out there. After visiting the merchant personally, sharing meals with the owner, and developing a level of comfort, we shook hands and pulled out our credit cards.
Both my business partner and I had no preset spending limit with American Express and could have put the entire charge on a single card, but we chose to diversify the spending across a handful of American Express and Chase cards for points-earning reasons.
You don’t just take a pallet of handbags with you as hand baggage…we arranged to have our freight forwarder pick it up and then ship it across the Atlantic. That takes time…several weeks at minimum. Bags not only have to ship, but then must clear customs and ship to our warehouses.
When our bags finally arrived, we found the vast majority were damaged. Some were scratched, some where dented, others were discolored. In a couple cases, the handles were ripped.
This wasn’t an issue of damage during shipping. Each bag was carefully wrapped and well-padded. Instead, it appeared we were sold customer returns (“seconds” as they are known in the industry).
Naturally, we reached out directly to the merchant to try to work this out. This wasn’t our first deal and we did not anticipate there would be any trouble.
No response to email, phone calls, or text messages.
We became concerned. Days turned into weeks.
Finally, we determined we had no choice but to initiate a chargeback against the merchant.
The chargeback prompted the merchant to reach out…and deny our return request. The merchant disputed the condition of the bags (despite clear photographic evidence) and threatened us, calling us crooks for trying to return the bags and hinting we were doing so because our customer had changed its mind.
Our contract specifies we have an absolute right to return for one year. That is affixed to every Purchase Order we issue. We even asked the merchant to confirm agreement to our terms and conditions in writing prior to entering the deal.
In other words, we legally covered ourselves.
We sent all the bags via UPS back to Italy. The vendor refused return service, literally telling the UPS driver to get lost. They now sit at a UPS facility somewhere in Italy. Damaged bags are of no use to us…it makes no sense to try to bring them back.
As they completed their investigation, American Express and Chase requested evidence. We submitted:
- Our Purchase Order with terms and conditions attached
- A copy of the email in which the merchant agreed to the terms and conditions
- Photos of the damaged bags
- Proof we sent the product back (UPS receipt + tracking info)
Easy case, right?
After months of back and forth, both American Express and Chase sided with the merchant.
The merchant is a retailer in Italy. It has a retail division and wholesale division. We bought from the wholesale division. It submitted a copy of its retail terms and conditions (a simple screenshot of its website) to argue that we had only 10 days to return the product.
Yes, that was their defense…we waited too long to return the product. Forget the fact that that we were not retail customers. Forget the fact that our contract unequivocally gave us a right to return. Nope, on the basis of the screenshot, both Chase and American Express argued too much time had passed and we would lose the disputes.
The “battle of the forms” is a classical problem in contract law, though in this case we were the only party which included terms and conditions in the contract.
Out of exasperation, I put the question to one customer service representative at American Express:
Is the problem that I have already paid? Is the problem that you cannot get my money back so you have to side with the merchant because American Express is not willing to eat this loss?
Both American Express and Chase have encouraged me to seek legal redress. Both have refused to re-open the cases.
What Do American Express And Chase Promise Consumers?
American Express tells me I “shouldn’t have to worry about a thing”.
Chase encourages chargebacks for:
- A product or service you received and are dissatisfied with
- A one-time purchase you returned or canceled, and you still haven’t received a credit
Whatever the fine print may say (and if there is fine print, I have not been able to find it), both American Express and Chase sell you the idea that if you get ripped off, they will have your back.
That is simply not the case. You have been warned.
The Consequences Of My Failed Dispute…
My business is not in a position to come up with hundreds of thousands of dollars out of thin air to pay for worthless product we returned to the merchant. You know what that means for my relationships with American Express and Chase, my business, and my own personal credit score…
After months of escalation, I’m so fed up with American Express and Chase. If they cannot protect a consumer who purchased designer handbags and received broken, dirty, discolored handbags…then who will they protect?
Please share your American Express or Chase chargeback stories below. Let me know if you have any questions or suggestions concerning my own case.