Chargeback in favour of buyer. What can I do now?

911bill

The buyer won a case and from what I can see, with no evidence at all, just "buyer thought item was defective, not as escribed". This came in via paypal on behalf of the buyers bank. 

I put up a fight, submitted photographs of the product in full working order, text messages which clearly show the customer has not followed instructions and a detailed appeal letter. I submitted this and within a very short time, the verdict came back, almost as if, it was all ignored. I can't help but feel like I've been robbed, he still has the product, he got his money back and I'm left to pay additional fees.

The chargeback was through his bank but he paid through paypal card payments, so I'm not seeing any info about what bank he is with or anything. I'm just left to rely on paypal disputing this for me, which I dont think they have, he seemed to just win by default. 

This is really unfair, we are a small business, we bent over backwards for this guy, he never once asked for a refund but just took this cheapshot via his bank. There must be something I can do?

This is the original issue for context;

Customer ordered a custom made inflatable tent to park his cars in from us. Had some minor issues in configuring it which resulted in some damage, I drove 4 hours to go and fix it and ensure everything was beyond perfect and customer could see this, he was happy. 

I took pictures on the day. One issue, was that the structure was not secured to the ground as instructed, only 1 bit of rope at a 90 degree angle to some fencing, not 45 degrees down to the ground. (There are 14 tie points in total), he had just used 1 rope, going through 3, totally wrong.

Anyway, next day, big 45mph winds and I get a screenshot of the unit, in a new location, deflated.

See messages;

[img]https://live.staticflickr.com/65535/53284383216_463a245e1a_z.jpg[/img]

[img]https://live.staticflickr.com/65535/53284632598_8e000d4ef5_z.jpg[/img]

[img]https://live.staticflickr.com/65535/53284839560_f887b08be2_z.jpg[/img]

[img]https://live.staticflickr.com/65535/53284383236_ded044609e_z.jpg[/img]

[img]https://live.staticflickr.com/65535/53283486742_312c915524_z.jpg[/img]

[img]https://live.staticflickr.com/65535/53284632603_9ed3f6c77b_z.jpg[/img]

[img]https://live.staticflickr.com/65535/53284839570_bd3cbd3a0a_z.jpg[/img]

Periods of no contact in between and totally ignoring my references to securing it down.

Then now, I get a chargeback from his card issuer via paypal.

I feel like this is a blatant case of buyers remorse. His message refer to damage also, damage caused by failure to secure it down correctly.

911bill

This was my appeal letter;

I am writing to provide a comprehensive response to the chargeback dispute initiated by ABCDEFG, hereinafter referred to as Customer, regarding their purchase of a custom-made inflatable garage from XXX

On 28/04/2023, Customer purchased an inflatable garage which was to be custom-made to their specifications. The product was later delivered as requested, accompanied by usage instructions which cover how the product should be secured to the ground and deflating it in winds exceeding 25 mph.

After delivery, we received a request for technical support from Customer's Partner, who was assisting the setup of the garage. We provided out of hours telephone support to ensure the unit was functioning correctly.

Subsequently, as a gesture of goodwill and to overcome any confusion with setup, a specialist and I travelled over 150 miles to visit the customer's premises to provide further assistance to rectify an issue caused by overinflation and correctly configure the product so that we were confident that everything was working as it should be. It is essential to highlight that, during our visit, we were able to fine-tune the unit and conduct extensive testing to ensure it was defect-free, including a pressure and smoke test. Every area of the product was tested once again and we were able to show the customer around the product, what work was performed and how the product works at which time no defects or failures to be not as described were addressed. We wanted to be absolutely sure, that everything was as it should be and it was. A verbal point made by customer was that a worker of the customer was being waited on for over 2 weeks to attend and secure the unit down to the ground.

The following day, areas of the UK were hit by high winds and the inflatable garage suffered damage being blowing about and subsequently deflating in winds in excess of 45 mph. Like any inflatable products, be they bouncy castles, awnings etc in order to remain in place they need to be secured to the ground used ropes/ties which are attached all around or by being weighed down. The inflatable garage is the same and unfortunately the unit had not been secured properly as directed in the user guide. A single tie was used across 3 points on the rear of the unit and fastened to a fence (See picture). The single tie is in no way sufficient enough to support the weight of this product in extreme wind conditions. There are 14 tie locations on the unit, all of which require their own dedicated tie.

Attached are screenshots of text messages between customer and ourselves outlining the issue but also the lack of supports used. A CCTV screenshot from customer shows the inflatable garage, collapsed and in a new location different to when we inspected.

The damage that later occurred resulted from non-compliance with usage instructions, specifically anchoring the garage to the ground. Customer acknowledged that if a car was inside, it would not have blown away which ultimately caused any possible damage.

In summary, we provided a fully functional defect free product and during our visit, addressed any concerns and physically demonstrated operation. Any damage that occurred afterward was unrelated to the product's quality but resulted from non-compliance with usage instructions, particularly anchoring the garage to the ground.

Given the evidence and circumstances, we kindly request that the chargeback be reconsidered. We remain committed to customer satisfaction and premium product delivery.

We appreciate your understanding and prompt attention to this matter. Feel free to contact us for further information.

DullGreyGuy

Chargeback is just part of the scheme rules of AmEx, Visa and Mastercard. The banks decision is in no way a legally binding decision but is just part of a commercial agreement you have to accept if you want to take payments by cards.

It's up to you to decide to chalk it up to experience or write the customer a Letter Before Action and then take them to the small claims court to recover the monies. 

ArbitraryRandom

Yes, depending on the cost of the item, your next step would be LBA followed by small claims (which you can do online and include the fixed cost of the fee in your claim) - You have the bulk of the evidence you would need already, so it's really just a case of if it's worth the time/effort for you. 

911bill

Thank you both for your replies.

I'm really shocked by this, I find it very strange that the guy was always pretty open with me, never once asked for a refund but seemed to ignore my instruction to just tie it down, and all would be ok. Clearly buyers remorse, what else but why he didn't simply try asking for a refund or something, is beyond me, going straight to the bank chargeback just seems like a cheap shot. Anyway, besides the point. 

Total amount was £2580 for product. A day visit, which I did as a gesture of goodwill probably cost me in the region of £500. 

I really hate the thought of court, things like that give great anxiety albeit, online would be better. This business was about helping people but also keeping my family comfortable and fed, this has really hurt. The guy is a millionaire and currently partying in Dubai, which really just adds insult to injury. 

I know if I contact him, he will just say that I can pick the product up, it was made bespoke for him and it was already covered in mud when I last saw it, I dread to think of it's condition now that it has been left after being blown/harmed by the wind. A 4 hour drive to go and do him a favour by removing 200KG's of product which I will not be able to resell. Perhaps salvage a £200 pump. 

I am already running at full capacity with early starts and late finishes around juggling a life, if I don't do court, I guess it's an expensive lesson. Although it seems any chargeback trumps any T's and C's I may have, so what's the point. I'm always at risk of chargeback if I take card payments it seems. 

I cannot believe the lack of protection for sellers in regard to this, not even a "refund to be given upon return of goods". Unreal! A way around this may be to put all business through somewhere like eBay and not host an online store where I'm exposed. 

Thanks guys, sorry for the emotion, just a hard pill to swallow. 

the_lunatic_is_in_my_head

Find a company online to send a letter before action (shouldn't cost more than £20). 

Buyer might buckle, they might not. 

Buyer might be in a position to cancel the contract if you didn't provide them with the information in schedule 2 of The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

https://www.legislation.gov.uk/uksi/2013/3134/schedule/2

Most noticeably due to it being custom made (although unclear if that means they picked standard options or it was truly bespoke). 

(o)where under regulation 28, 36 or 37 there is no right to cancel or the right to cancel may be lost, the information that the consumer will not benefit from a right to cancel, or the circumstances under which the consumer loses the right to cancel;

Whether the buyer knows the finer points of their rights to defend a claim is doubtful, just hope they don't find the consumer rights board here  

Of course you may be complying with all the required info in which case the buyer would have to defend the claim by stating the goods did not conform.

After 6 months burden of proof is on them, it's unclear whether they would have been considered to have exercised their final right to reject at any point by performing the chargeback but if not they are now past 6 months and it would be down to them to prove (on the balance of probabilities) the problems were due to the goods.

You'd hope a LBA or the initial small claims filing would work as a bluff and they'll pay but it's a lot of money so the buyer might decide to defend. 

My understanding is card chargebacks for NAD are very hard to defend and although rare you really either need to write them off or take the time to recover via small claims. 

ArbitraryRandom

the_lunatic_is_in_my_head said:

Buyer might be in a position to cancel the contract if you didn't provide them with the information in schedule 2 of The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

https://www.legislation.gov.uk/uksi/2013/3134/schedule/2

Most noticeably due to it being custom made (although unclear if that means they picked standard options or it was truly bespoke). 

(o)where under regulation 28, 36 or 37 there is no right to cancel or the right to cancel may be lost, the information that the consumer will not benefit from a right to cancel, or the circumstances under which the consumer loses the right to cancel;

Whether the buyer knows the finer points of their rights to defend a claim is doubtful, just hope they don't find the consumer rights board here  

The OP's terms and conditions might give that info (if it's standard boilerplate). But would it matter the item was bespoke given they didn't try to cancel/exercise their rights within statutory timescales? 

The buyer claimed the item was defective/not as described and the item is now broken - so the case would be the item was not defective and was broken due to misuse (which would be the case bespoke item or not)... wouldn't it?

the_lunatic_is_in_my_head

ArbitraryRandom said:

the_lunatic_is_in_my_head said:

Buyer might be in a position to cancel the contract if you didn't provide them with the information in schedule 2 of The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

https://www.legislation.gov.uk/uksi/2013/3134/schedule/2

Most noticeably due to it being custom made (although unclear if that means they picked standard options or it was truly bespoke). 

(o)where under regulation 28, 36 or 37 there is no right to cancel or the right to cancel may be lost, the information that the consumer will not benefit from a right to cancel, or the circumstances under which the consumer loses the right to cancel;

Whether the buyer knows the finer points of their rights to defend a claim is doubtful, just hope they don't find the consumer rights board here  

The OP's terms and conditions might give that info (if it's standard boilerplate). But would it matter the item was bespoke given they didn't try to cancel/exercise their rights within statutory timescales? 

The buyer claimed the item was defective/not as described and the item is now broken - so the case would be the item was not defective and was broken due to misuse (which would be the case bespoke item or not)... wouldn't it?

Although OP of course may comply with the required info, I only mention it as many places don't and if "going legal" it's be to have all your ducks in a row.

If the required info isn't given then the cancellation period is 1 year and 14 days*, regardless of what may have occurred before (i.e claims of the goods not conforming) the consumer would be entitled to cancel the contract within that time. 

Under the standard cancellation rules the retailer is permitted to make a deduction for diminished value due to handling that goes beyond what is required to establish the nature and characteristics of the goods. 

Whilst the buyer's handling clearly does so and the value appears almost zero, in the event the required information isn't given the retailer no longer has that right and a full refund is due.

I can't say how a court would view the matter in such an instance (the buyer causing damage through misuse rather than just looking at the goods) but the removal of the ability to reduce the refund is clearly a punishment for not providing the info which weakens the retailer's position. 

Equally without the required information the consumer is not bound by the contract but admittedly I don't know what that means in real terms when a contract has got to this point (i.e goods delivered months ago).

*There is a third cancellation period and that is 14 days from the date the information is given, so if OP, having not done so previously, gave the required information today the buyer would have14 days to cancel from today. 

I would assume, if all that information was spot on, the right to reduce the refund would apply, that said for distance contracts the info must also be provided via a durable medium no later than the goods are delivered so I'm not sure how that comes in to play with diminished value.

It is pretty much "boilerplate" but must still be present, for people on eBay selling stuff at lower prices the risk of not providing the info is probably a cost that an be absorbed in a rare event such as this but when you are selling items for £2500 at a distance it is very sensible to make sure that information is correct.

Very messy when it's not done right and which way a court would go with a buyer who starts to argue on this stuff I can't say but it certainly appears to weaken what would perhaps otherwise be a more straightforward case. 

Again not to imply the OP isn't dotting the i's and crossing the t's, just a note on what might need to be considered  

GadgetGuru

I would be taking this via small claims court as far as I possibly could. 

The one and only time I had to file for a chargeback (for the purchase of fraudulent airline tickets) I found it a right nightmare - I don't know how people get chargebacks approved so easily. I had to provide evidence of a refund request from the seller, which I did, but then the bank also wanted proof of acknowledgement from the seller/agent - something stating that they would refund me. I informed my bank this would be difficult as the seller was no longer answering my calls or responding to any texts/emails etc - above all else, how exactly are you supposed to get a refund acknowledgement from a scammer?!
In the end I had to create a response myself, make it look like it was from the seller, for the bank to accept it and the chargeback to go through, I know this is wrong, but its the only way I could get the bank to act. 
Hence I just don't understand how people do this so easily. In the OP's case there was no request for refund made to the seller, and no refund acknowledgement sent, so how did he manage to get it so easily!

Either way, it's clearly wrong and I wouldn't let it drop so easily. 

911bill

Thank you for the replies!

I am just mind blown, at how this went in favour of the seller, I obviously don't know what he submitted to the bank, and for the life of me, can't see how anyone could side with him based on simply allowing the product to be blown down in the wind, which is clearly his fault, who leaves an inflatable out in 45mph winds and thinks it would be ok. I've tried to get people to see it from the buyers point of view but no one can, the fault is not with me, the seller, it is the buyer, and buyers remorse just shines through here. 

I provided a good account of the situations, instructions, picture with annotations which I took on the day and his text messages! I did think it was a solid defence with a shot for a small business to win a chargeback case, clearly not. 

he didn't tie it down, he let it blow down, he never once asked me for a refund, just sent open statements of "not going to use it", "think its got tears", "it's F-ed", then gets away with a chargeback while the product sits there, possibly damaged. 

I'm out of pocket on a product I went above and beyond on, didn't make anything on it as I wanted this to be right and would have used it for advertising, I spent a day out to ensure the product was all fine at the premises and now the stress and aggravation of this. 

Just a note on my T's and C's, from what has happened, it seems like a chargeback trumps any T's and C's I may have, perhaps in a court environment, it would be different. However, I have updated my T's and C's to cover what I think should be in there. I shall seek some advice on this. 

Paypal have just closed the case, can't and won't give any info on how I could possibly go back to his bank, what bank it is with, pretty much, tough luck, see you later, go talk to the buyer. 

I'm very angry, I keep going to call the buyer but I am worried for what might be said. I am letting myself cool off, trying to seek all the advice possible. 

I really really really do not want to go through small claims court, this would just give me huge anxiety, it just would not be worth it. My accountant has said the money lost can be offset against tax, so all is not lost but its the principle and kick in the nuts of the moment, this guy has millions, he is not short on cash and flashing it, so to do this, is a real insult. I can't let it go and for him to just go off into the sunset laughing. 

911bill

And for reference, here are my T's and C's, obviously company name hidden.

1. General

1.1. This website is the official platform for Company X, a product provided by Company X UK based in the United Kingdom. We are the worldwide sole-suppliers of Company X air chambers and covers. Partner websites are those of distributors or re-sellers. If you purchase or have purchased a Company X from a distributor or re-seller, your business is conducted with that partner, not with Company X UK. All inquiries should be directed to the partner with whom you are or have been engaged.

2. Refund and Return Policy

2.1. Under your contract with us as a consumer, you have the right to cancel your contract at any time within 14 days of receiving the Company X, in accordance with the Distance Selling Regulations.

2.2. You must handle the Company X with reasonable care during this period. The Company X must be returned complete and unused in its original packaging.

2.3. If you wish to return the Company X, a restocking fee of £50 will be applied. This fee covers the cost of a full product inspection and restocking.

2.4. We do not provide refunds for any shipping or collection charges. If we arrange collection, you may be charged for the cost of collection (up to £100 in some cases).

2.5. It is essential to inform us of the cancellation within the regulatory 14 days.

3. Product Guarantees

3.1. Company X products are guaranteed against faulty materials and workmanship.

3.2. All standard Company X products are guaranteed for a period of one year with regard to material and workmanship.

3.3. Electrical components forming part of the original equipment carry a further warranty extending to three years from the original purchase date.

3.4. In the event of a suspected fault, please contact us as soon as possible to determine the best possible solution. Video and pictures will need to be sent.

3.5. In cases where items are returned for factory inspection or testing, we will make every effort to expedite the process.

3.6. We reserve the right to replace or repair any items during the warranty period.

3.7. It is the customer’s responsibility to report any incorrect supply within seven days of receipt/delivery.

3.8. All reasonable efforts should be made to return the Company X in its original packaging.

3.9. Returned Company X units must not be damaged or used in any way whatsoever.

4. Usage and Misuse

4.1. The Company X is designed for the protection of vehicles. Misuse or damage to the Company X, including punctures, environmental events, abrasions, or using it for purposes other than vehicle protection, will void the warranty and may result in additional charges for repairs or replacement.

5. Availability and Orders

5.1. All Company X products are subject to availability. In the event that a product is temporarily unavailable, we will contact you to discuss available options. If you decide not to proceed, your order will be cancelled.

5.2. Our policy is to debit any payment upon order receipt, in full.

5.3. Refunds can only be processed using the same payment format as the original purchase payment.

6. Personalized Products

6.1. Goods or Company X products made to customer specifications are considered personalized and are therefore excluded from the right of cancellation.

7. Refunds and Processing Times

7.1. Refunds to Debit or Credit Cards may take several days to clear. We aim to process refunds within 3-4 days but reserve the right to take up to 21 days if necessary.

8. Statutory Rights

8.1. Any warranty offered does not affect your Statutory Rights.

9. Maintenance and Use

9.1. All Company X products require regular maintenance and servicing. It is essential to keep the equipment in a serviceable condition.

9.2. Some products are specifically designed for use only in certain environments. For example, products intended for indoor or in-garage use must not be used outdoors, as this will invalidate any warranty offered.

10. Repair Service and Continued Use

10.1. Company X/recommended agent offers a repair service in the event of accidental or other damage. However, we reserve the right to decline any repair or refurbishment.

10.2. Any damaged or poorly maintained Company X units will offer restricted or limited, or even zero, protection. Continued use of such items is expressly forbidden.

11. Responsibility for Contents

11.1. You, as the owner of the Company X, are responsible for the contents placed within it. It is essential to regularly monitor the condition and security of any items stored inside the Company X.

11.2. We recommend that you take necessary precautions to safeguard valuable or sensitive items from damage, theft, or environmental factors.

11.3. Company X is not liable for any damage, loss, or theft of items stored within the Company X. It is your responsibility to ensure that the contents are adequately protected and insured, if necessary.

11.4. We advise you to follow local laws and regulations regarding the storage of items within a Company X and to take appropriate measures to protect your possessions.

11.5. The customer acknowledges and agrees that it is their responsibility to regularly inspect and maintain the contents of the Company X to ensure their proper condition and security.

11.6 The customer shall take all necessary precautions to safeguard their possessions stored within the Company X and to prevent any damage or loss due to environmental factors, including but not limited to wind, snow, or any other adverse weather conditions.

11.7 The customer is responsible for ensuring that the outdoor unit, including any anchors, straps, or securing mechanisms, is properly and securely fastened to withstand environmental factors, including wind and snow. Failure to do so may result in damage to the Company X and its contents.

11.8 It is the customer’s responsibility to comply with any local laws and regulations regarding the use, maintenance, and security of the Company X, as well as the storage of items within it.