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March 26th, 2009:

#6. Chargebacks and credit cards

Newspaper stand accepts credit cards

Maybe you ordered a new computer from a shady website that never came, or perhaps you donated $10,000 to the Presidential Inaugural Committee last year, but botched security prevented you from seeing Obama be sworn in.

Either way, if you are in America and paid for your purchase with a credit card, you’ll likely be ok. Simply contact your credit card provider and start a “chargeback” process. They will go after the merchant who wronged you and get your money back, just as American Express is doing against the Presidential Inaugural Committee.

In America, consumer protections offered by credit card companies are essentially available to every American for every purchase.

There are three reasons for this:

1. Easy Credit (until recently, hopefully to be continued in the near future) – Every man, woman or unemployed young child in America was barraged with pre-approved credit card offers every day. Getting a credit card was simple. All you had to do was open the most colorful advertisement you receive on a particular day, and bam, a credit line is yours.

2. It’s everywhere. Everyone in America takes credit cards. From a NYC taxi to a rural mom & pop restaurant, to newspaper boxes (see photo), everyone accepts credit cards. So charge away.

3. No merchant fees. This is perhaps the most important reason. In America, merchants can’t charge you a fee – or impose a minimum purchase amount – to use your credit card. Instead, the merchant needs to cough up the fixed cost and 1.5 percent +/- that the credit card company charges to process the transaction. If you’re lucky, your credit card company might even split the money the charge the merchant with you in the form of a cash-back scheme. So you want to charge that 89 cent coffee even though doing so will result in the store losing money? No problem. This is America, and that means we have the right to collude with big credit card companies against small businesses.

But don’t think you can charge your way across Europe with the same ease you can in America. No sir. Europe might be a welcoming place for people who don’t like to shower too often, but it not welcoming of credit card users.

There are two reasons for this:

1. Europeans hate customers. When you walk into the typical European shop or restaurant, it is abundantly clear that customer service is not the top priority. As a result, they don’t do anything to make your experience there easier – such as accept credit cards.

2. Europeans will shake you down. America might not have credit card surcharges, but Europe sure does. The typical merchant will add on enough to cover their fees plus a bit more to line their pockets with as well. 

So when in Europe, remember to take plenty of cash out from the ATM’s. But watch your pocket, as Europe is chock-full of pick-pockets who rely on the “cash-only” system to ensure they have plenty of targets.

And next time you go to buy a cup of coffee in the morning, go ahead and charge it – not because you have to – but because our great nation gives you the freedom to do so. If the coffee sucks, you can always call your credit card company and ask for a chargeback.

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