Your Business Credit

Chargebacks over merchandise quality can be tricky

Your Business Credit columnist Elaine Pofeldt

Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of, a website for independent professionals. She writes “Your Business Credit,” a weekly column about small business and credit, for

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QuestionDear Your Business Credit,
I’m currently in a dispute with Chase Visa over a charge we made for power equipment. After the purchase, we realized we fell for a scam. The items were not where they came from and we found complaints about the scam online.

We feel the product is not genuine or something is wrong with it. We requested a refund, but the merchant requested $400 in restock and pickup fees. The advocate for Chase advised us not to pay the merchant further, as we’re not bound to their policies if it’s a quality issue. The merchant has responded to the dispute, and we have sent in our documents as well. Now Chase is asking us for a second opinion.

I understand this might be standard for a quality chargeback, but I’m at a loss on how to proceed. Do I get a similar vendor to examine our equipment for its genuineness? We also called Honda to see if the merchant is an authorized dealer, so maybe we can get it in writing that they are not? – Rhonda

AnswerDear Rhonda,
What a frustrating situation. You didn’t mention what the value of the equipment is, but the pickup and restock fees are pretty substantial, so I’m glad you’re asking questions.

Before you go on a wild goose chase to find a second opinion, I would go back to the Chase advocate and ask what types of experts are acceptable. You don’t want to pay an expert who does not qualify. Also, ask what type of information you need to obtain from the expert to make your case. Is it a letter? An email to Chase? A completed form? Handling the paperwork correctly will speed things along.

Once you know what type of expert you need, you will need to understand how he or she is determining if the equipment is genuine, so you can make your case. I am not sure what you meant by “the articles are not where they came from.” I think you are trying to say that the articles didn’t come from where you were led to believe they would originate. If so, you might point that out. Look on the company’s website for information on where it says the products will be shipped from and provide Chase with any proof you have that contradicts this.

It is also important to know that Chase will not be the final decision-maker in the chargeback process. It will be Visa, the payment network over which the payment was processed. You, your bank (Chase), the merchant and the merchant’s bank all used the Visa network to make the transaction. Visa’s document “Chargeback Guidelines for Visa Merchants” runs 94 pages and describes many variations of disputes and how they will be resolved. It appears your dispute most likely falls under a category called “Reason Code 53: Not as Described or Defective Merchandise.” Visa’s guidelines note that the parties may be asked to provide evidence, that the parties may go to arbitration, and that Visa’s decision on liability is final.

Your question is a good reminder to all small-business owners who buy equipment to do their homework. Most of us are very careful about researching new products and services. However, we often are less careful when we are considering vendors and suppliers. You discovered this the hard way when you found the complaints online after the fact.

However, that’s the past, and it’s time to move on. Once you’re clear on exactly what you have to do to make your case in this dispute – which is really with the merchant and not with Chase, your intermediary – you’ll be on your way to resolving this problem. Good luck!   

See related: 6 steps to getting a credit card chargeback, How chargebacks work

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