We wrote about credit card chargebacks in 2012, largely looking at when the buyer is out of town — or across the country — and the implications of acceptance and delivery: https://mikebrandlyauctioneer.wordpress.com/2012/12/08/auctioneers-and-credit-card-chargebacks/
Today, we look more closely at a live auction — where typically the buyer is in person, and simply takes his auction purchase with him after paying with his credit card.
In this situation, it’s possible the buyer will take his purchased item home and then claim he doesn’t have it, or that it isn’t as it was described. If he contacts his credit card company, chances are his charge will be [initially] reversed.
How can an auctioneer prevent or mitigate these types of chargebacks? For one, where the buyer says he didn’t receive his item, the auctioneer/seller can have the buyer sign a receipt at the time of purchase. Secondly, where the buyer says the item isn’t as described, the auctioneer/seller can see the credit card receipt says, for example, “All sales final — no refunds — no returns.”, citing essentially that his purchase is sold, “as-is.”
We have written about “as-is” purchases at auction, most notably here: https://mikebrandlyauctioneer.wordpress.com/2015/11/10/an-auctioneers-as-is-primer/. One material part of “as-is” at auction is that the buyer had reasonable opportunity to preview (inspect) prior to purchasing. Said another way: We as auctioneers/sellers cannot hold buyers to an as-is transaction absent reasonable opportunity to inspect.
However, can the auctioneer/seller include in his terms and conditions that the buyer agrees to not “chargeback” regarding any purchases? In other words, the buyer gives up the right to chargeback, regardless of circumstances? So the auctioneer/seller can misrepresent and or not provide pre-auction inspections, and the buyer has no recourse? It’s nearly uproarious.
Merchant providers have contracts with their merchants which say that buyers have certain rights — along with the rights of merchants — which lay out a more-or-less equitable, fair and reasonable relationship between the parties: merchant (auctioneer/seller,) buyers and the merchant provider; one particular buyer right is the prerogative to file a chargeback to be evaluated by the provider.
I might say that the recent tendency by some to suggest auctioneers’ terms and conditions can “say absolutely anything” is well disputed here. First, selling as-is requires inspection, and merchants (auctioneers) have obligations in order to keep their provider relationships intact. We wrote about this troubling culture of anything-goes here: https://mikebrandlyauctioneer.wordpress.com/2016/08/01/an-auction-where-21/
It could be that in some areas of the United States, fewer people are attending auctions (buying at auction) and auctioneers are in turn even leaving out the word “auction” in their marketing. I would suggest making terms and conditions increasingly aberrant will only intensify this possible distaste for the auction method of marketing, and worse will likely expose the auctioneer and seller to unwanted legal or contractual disputes.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.
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