> I was under the impression that if the merchant got an 'approval' number
> from the CC issuer that they would not get hit for chargebacks...
That just means the card is validated and a hold was placed on the
card. And when the cc charge goes through, if they don't use the same
approval number, the hold won't drop for several days. I stayed at a
hotel that did that and the card failed when i checked out. Every day
they billed $100 - 200 to my room in case i used anything from the
bar and then used the last approval for the final bill. After 8 days
they had the card all but maxed out with holds and the last approval
code was only good for $100. We called the CC and they said the hotel
had to use the first code - the hotel said they didn't have the first
code... it took 30 min to get it straightened out.
A cc company can still investigate and issue a chargeback if the
customer complains. In most cases, the merchant will try to solve the
problem and refund it because a chargeback really costs them a lot of
money - $25 or more in chargeback fee, on top of the credit slip
total.
> Of course: even if the merchant doesn't get hit, recall that the only
> parties bringing any money to the table are us customers, and so
> regardless of how the fraud gets compensated, it'll come out of our
> wallets somehow [either in our CCs [for those of us with with-fee cards]
> or higher interest rates [for those of us who carry balances] or via
> higher merchant fees [which then show up in the prices]. Less fraud is
> good for all of us [not to mention, it'd be good to catch the miscreants
> and throw them in jail..:o)].
Yeah, right, the cc companies absorbe it and pass it along - NOT! They
send it back to the merchant.
One can argue they do absorbe charge offs, but it's not paid by the
rest of us in the form of higher fees etc - that too is built into the
cost of doing business and eliminating bad credit risks won't lower
costs. In fact, most bad credits pay more in interest and fees before
they stop paying than they charged (so the bank actually made money on
them) and the cc gets to write off the balance as a loss on taxes,
sell it to a collector who gets 7 years to harrass and attempt
collection. If they didn't make out like bandits, they wouldn't issue
cards to people with bad credit.
--
Diane Poremsky
[EMAIL PROTECTED]
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