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Credit Card Chargeback? Be Cautious

By January 15, 2010

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When disputes arise between repair shops and customers, many car owners are quick to get on the phone with their credit card company to reverse the charge. The chargeback is an important tool when things get bad, but don't pull the trigger too fast. Communication is key when you're in any type of transaction. Sure, if you think you're being scammed or stonewalled, get the ball rolling on a chargeback. I urge drivers to use a credit card for all of their maintenance and repairs they have performed at a shop -- it's good protection. But if you skip the important communication steps and don't try to work things out, you might be shooting yourself in the foot. As soon as the chargeback takes place, you're telling the shop that you're finished talking and you want the powers that be -- the credit card company -- to decide the fate of the transaction. Unfortunately if you have a legitimate dispute but it doesn't qualify for a chargeback, you're going to lose. If that happens, what are the chances your mechanic will be willing to work something out? He probably won't even want you as a customer anymore.

Comments
January 26, 2010 at 12:56 pm
(1) Patrick Sullivan says:

While it is true that to contact your credit card company to begin the process to reverse a charge is one of the last things to do before taking legal action, in many ways it can be efficient.

A charge back can save all the parties involved a long drawn out time consuming court room procedure, that without using a credit card, may be the only way to remedy a fault.

A charge back will not ordinarily happen if it is of a fault that we would call error, it is only if the fault is one that questions the entire legal validity of the transaction.

If you ask your credit card company to reverse a charge, the standard is: Preponderance of the credible evidence. “Can you satisfactorily prove what you are saying in a court of law?

You may need to bring in an expert to give a written opinion and sign a statement to what you allege, before a credit card supplier will reverse a charge.

After 60 days the transaction is complete. So a time limit begins when the charge is added to the card.

I used the process once in 40 years of using credit cards and it saved a lot of courtroom time. For that matter, a $1000 dispute may not be large enough to go to the trouble to take to court. On the other hand, if you had used a check or cash, that would be your only remedy.

The credit card companies also have the ability to see the transactions and would be aware if there were a series of customers that sought reversals, and can take actions that could protect a card user.

In the issue involved with this writer, Only too late in the transaction, logging on to a BBB, Better business bureau web site, it was obvious there were better choices to make other than the shop in question.

If you have a BBB in your area, not a bad idea to check out your repair shop before you have any work done. Again, most shops have logged customer actions; most shops clear their work and resolve their issues. If the shop has a large number of issues and has not resolved them, maybe you should shop another shop.

Credit card purchases have another potential value. Some years previously, having bought a fuel pump, it failed. The receipt could not be found. Checking with the credit card company determined that it was purchased about 11 months and 3 weeks before. The pump had a 1-year warranty. Taking a copy of the credit card statement to the parts supplier allowed the supplier to gladly exchange it for a new one.

If that were not a credit card purchase, likely it would have cost for the second fuel pump.

While not encouraging folks to rush to seek a charge back, as a last resort it is good to have another set of eyes and ears in place that can, without adding a lot if expense, act for the consumer.

For automotive service, First Check BBB and see how the shop compares. Putting your bill on a credit card economizes your time if and when you need to see what was done.

Using a credit card for your purchase can sometimes add a bit of unseen value.

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