I don't know which amount is larger: bounced checks or fraudulent
credit card charges (or even those who don't pay their credit card
bills). Both cost all of us money. When we subscribe to a common
thing (checks, credit cards, paper money), we also agree to be
responsible for the risks (bounced checks, fraudulent charges,
counterfeit money).
I just charged back two charges on one credit card that were
obviously fraudulent. Total cost: ~$180. Who pays? The seller of the
goods or the credit card company (in this case, the seller of the
goods because the transactions were determined to be fraudulent).
Some years ago, I partially paid a ~$900 credit card bill with a $90
check (10%) as I needed the cash for something else. Occasionally,
this makes sense (in my case, I would have been all paid up the next
month). The credit card company electronically deposited the check
for $900 (I thought these things were supposed to be double-entered).
Fortunately, I had the money in my account, but it did cause me some
issues as I had that money set aside for something else that month.
When I called the credit card company to see about obtaining a copy
of the check to see if the mistake was mine (maybe I wrote it for
$900 when I meant $90) or theirs, they said it would cost $80/hour to
"research" it and retrieve the actual check or electronically scanned
copy, and the average "research" time was 2-3 hours. I would have to
pay up-front for it, and, if I was right, they would refund the money
to me. Such a deal!! I decided not to "research" it and told them to
cancel my card. Got moved to a retention specialist (why do companies
try this after they plss you off, rather than doing the right thing
from the beginning? does it save them money? does Comcast know this?
does Verizon?), who gave vague hints about how it would affect my
credit rating to cancel a largish line of credit. I cancelled it
anyway (got an actual credit rating hit of 3 points for 2 months:
like that's something that will keep me up at nights!). So, they lost
thousands of dollars worth of annual business over 2-3 hours at
$80/hour. Makes perfect business sense! It was a large bank, one that
got some of the bailout money recently. And that is the problem with
electronic cashing of checks. Completely electronic transactions are
a little better: at least it is your bank against theirs.
Adil
At 01:26 PM 7/16/2009, you wrote:
Date: Thu, 16 Jul 2009 11:41:20 -0500
From: "Snyder, Mark - IdM (IS)" <[email protected]>
Subject: Re: Batch downloading of bank check images
Banks _Love_ it when their customers use debit/credit cards instead of
cash! They make so much from both parties in the transaction - two
revenue streams to tend; fees all around!
Chris, those 70's comparisons certainly didn't include charge-backs on
the cards. Most of us who still write checks for most purchases (say
20-30/month for a single-user personal account) are less likely to
bounce checks than the large numbers using them in the 70's. I opened
my account over 30 years ago and have never bounced a check. I use
plastic in the few large merchant stores I visit, buying on the web,
travel and in urban places.
I use checks out in the rural area I live in, where many people know me.
Merchants in some places still like to get paid in cash or check because
the risk of a bad check is cheaper than the fees they pay for the
plastic. Other places, not so much, because the risks are different.
Thank you,
Mark Snyder
-----Original Message-----
This is true, but not the whole story. Checks aren't free either: some
percentage of them bounce, and we have to pay for that too. This isn't
an issue with credit card purchases.
When I worked for a bank back in the 70s, we had statistics proving that
the credit card discount rate was actually less than the check loss
rate. I don't know if that's still true, but it certainly was back then.
*************************************************************************
** List info, subscription management, list rules, archives, privacy **
** policy, calmness, a member map, and more at http://www.cguys.org/ **
*************************************************************************
