My partner very nicely bought me a gift cert for a local bike shop to buy a bike. When she bought it she told them I might have another bike in mind and if so could she get a refund. They told her that yes they would credit her card back and they said there would probably be a processing fee. She didn’t ask for the details of the fee which yes, was a mistake. I didn’t want to buy a bike from that shop so she asked for a refund and had some hassles finally getting one, and then was told that the processing fee is $100. She complained that it was too much and they said “well we have to make something off of this”. Really all “this” involved was charging her card and then a month later refunding her card.
We are in CA and there is a law regarding gift certificates that says: Q.4. Can the holder of a gift certificate or gift card redeem it for cash?
A. This depends on the policy of the seller. The gift certificate law states that a seller must either redeem a gift certificate or gift card sold after January 1, 1997, for its cash value, or replace it with a new certificate or card at no cost "
Does anyone know whether this applies in this case? I can understand a fee to cover any credit card transaction fees they might have incurred, but I would assume that is a lot less than $100. Also am I right to think this is ridiculous? I felt bad not buying a bike from them after she went to all the trouble, but now with this experience I’m glad I didn’t.
It was $4000. So if the shop was charged 3% by the credit card processing company then that actually would be over $120. That seems like a lot. They really charge that much?
Yup, it looks like you are out of luck. You can try to appeal to their sense of good will and reason. Perhaps they will knock down that fee to sometime closer to their CC fee.
Next time, consider a universal gift card that is instantly transferable to cash, is accepted anywhere and will never expire (if you happen to leave CA)…money.
It was $4000. So if the shop was charged 3% by the credit card processing company then that actually would be over $120. That seems like a lot. They really charge that much?
3% is pretty typical, but it varies by type of card and the processor. Mileage, or point/reward, cards will cost the retailer a higher percentage. Yes the retailer is who pays for your reward points.
That said, in the case of a refund, the card processor should refund a portion of that processing fee back to the retailer. How much will vary by card processing company.
I would not be so quick to avoid the shop. They probably got charged around the $120 CC fee. In their (the cc company) eyes, a transaction happened…and the bike shop will not be getting any refund. Your charge of $100 seems reasonable…don’t lose a lot of sleep over it. Next time have your partner pay by check.
Question: How is this Credit Card transaction different from others in which full refunds are always implemented with no “processing fee” ?
It’s not different…but a company like a LLBean or Zappos or any other large retailer that provides a lot of refunds will have a much different deal with a Visa or MC than a small independent bike shop. And whatever the deal is…whether they pay a fee or not for providing refunds is built into the cost of business. In this case, if it is a small independent bike shop…they probably got charged.
My partner very nicely bought me a gift cert for a local bike shop to buy a bike. When she bought it she told them I might have another bike in mind and if so could she get a refund. They told her that yes they would credit her card back and they said there would probably be a processing fee. She didn’t ask for the details of the fee which yes, was a mistake. I didn’t want to buy a bike from that shop so she asked for a refund and had some hassles finally getting one, and then was told that the processing fee is $100. She complained that it was too much and they said “well we have to make something off of this”. Really all “this” involved was charging her card and then a month later refunding her card.
We are in CA and there is a law regarding gift certificates that says:
Q.4. Can the holder of a gift certificate or gift card redeem it for cash?
A. This depends on the policy of the seller. The gift certificate law states that a seller must either redeem a gift certificate or gift card sold after January 1, 1997, for its cash value, or replace it with a new certificate or card at no cost "
Does anyone know whether this applies in this case? I can understand a fee to cover any credit card transaction fees they might have incurred, but I would assume that is a lot less than $100. Also am I right to think this is ridiculous? I felt bad not buying a bike from them after she went to all the trouble, but now with this experience I’m glad I didn’t.
If you are spot on with the quote from the LBS, it sounds like everyone is looking at this from the wrong angle talking about credit card fees. IMO **“well we have to make something off of this” **implies that they are looking to profit from the situation. Not that they are trying to recover credit card fees lost in the transaction and then subsequent refunding.
Actually the retailer probably got hit with the fee for the refund transaction as well. Credit card companies never lose money.
Why would they get dinged on the refund? That makes no sense.
Also, my airline miles earned are taken away when there’s a refund, why would the shop still be paying the fee?
Doesn’t make sense. Still happens. It is the reason skyscrapers and football stadiums are named after banks.
If you are spot on with the quote from the LBS, it sounds like everyone is looking at this from the wrong angle talking about credit card fees. IMO **“well we have to make something off of this” **implies that they are looking to profit from the situation. Not that they are trying to recover credit card fees lost in the transaction and then subsequent refunding.
I would read the “have to make something” as having to make something to cover the CC fee they are being charged…and not making a profit on something like this.
Question: How is this Credit Card transaction different from others in which full refunds are always implemented with no “processing fee” ?
It’s not different…but a company like a LLBean or Zappos or any other large retailer that provides a lot of refunds will have a much different deal with a Visa or MC than a small independent bike shop. And whatever the deal is…whether they pay a fee or not for providing refunds is built into the cost of business. In this case, if it is a small independent bike shop…they probably got charged.
Correct. It depends on what type of contract the retailer has with their acquiring bank. That said, the retailer cannot implement a refund policy on the fly as they seem to have done in the OP’s situation. It is required by the merchant to disclose refund policies to credit card holders at the time of purchase.
If the retailer insists on the charge, the OP’s best bet is to call their card issuing bank and see if you can dispute the fee. In the US, the credit card holder has the most protection.
Finally, I hope this is a lesson learned that you shouldn’t buy a gift card if you know the person you’re giving it too might not want it or want a refund for it. You probably would have been better off asking the bike shop for an unloaded gift card that you could present to him as a gift, and if he did want to make the purchase from that bike shop, then you go ahead and load the card. That way, nobody loses money in wasted transaction fees.