Can merchant charge my credit card for an item on back order?

August 31, 2016 15:46 by Consumer Ed

Dear Consumer Ed:

Can a company charge my credit card for the full price of an item that is backordered? I was always told that you legally could not charge someone for something that you did not have in stock and could not charge them until it shipped?

Consumer Ed says:

Despite what you have been told, it is actually not illegal for merchants to charge for a product before it has shipped. However, if your order is not delivered, you are guaranteed a refund under the Federal Trade Commission’s Mail or Telephone Order Merchandise Rule, which requires that your order be shipped within the time stated in company advertising or by phone.  If no specific time is promised, your order must be shipped within 30 days from the merchant’s receiving a "properly completed order" with your name, address and payment by check, money order or authorization to charge an existing credit account.  If the order is not shipped within the promised time, the merchant must notify you of the revised shipping date and give you the option to cancel for a full refund or accept the new shipping date. Since you paid by credit card, the merchant is required to credit your account within one billing cycle. For future reference, had you made the purchase with a debit card (this would also apply to cash, check or money order), the merchant would be required to mail your refund within seven business days. 

However, many credit card issuers have policies against sellers charging a credit card account before shipment. If you think a seller charged your account too soon, report it to the credit card issuer. Otherwise, the issuer has no way to know the seller isn’t following its policies. 

If you are unable to resolve this issue, you can file a complaint with the Federal Trade Commission at www.ftc.gov or with the Georgia Department of Law’s Consumer Protection Unit by visiting www.consumer.ga.gov or by calling 404-651-8600.


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Can I get a refund on a phone order if I cancel within 3 days?

June 17, 2016 21:16 by Consumer Ed

Dear Consumer Ed:

I bought a metal building over the phone that I was going to use as a tool shed.  Can I cancel the contract within 3 days without a penalty?

Consumer Ed says: 

Whether you have the ability to cancel a contract or not generally depends on the terms of your contract. If the terms of the agreement contain no option to cancel the contract and you cancel anyway, you may be obligated to pay at least a portion of the sale price to the seller.  This is true even if the contract is not in writing.  However, if the terms of the contract allow you to cancel it within a specified amount of time and you do so within that time period, then the seller should be required to refund your payment without a penalty.

Despite popular belief, only certain types of contracts can be cancelled within three business days.  This three-day right to cancel or “cooling off period” is limited to cash or credit consumer transactions of $25 or more that were initiated through face-to-face contact away from the seller’s regular place of business, such as a door-to-door sale. Unfortunately, this does not include transactions made entirely over the phone, such as yours. For more information on what types of contracts are subject to the three day right to cancel, visit: http://www.consumer.georgia.gov/consumer-topics/canceling-a-contract.

Georgia does not have any law that requires a business to provide a refund or accept returns. Rather, businesses set their own return policies (including setting time limits on accepting returns), and may offer consumers cash, in-store credit, exchanges, or no adjustment at all. While a seller isn’t generally required to post its policies, it must honor any refund or return policies it does have.

Your best protection is to ask the seller about his or her policy before you purchase an item. Find out if there is a time limit for refunds and what that time limit is. Remember, there may be different policies for different types of merchandise, so also ask what the policy is for the specific item you are purchasing.

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Are these deep discounts advertised really bargains?

April 27, 2016 18:27 by Consumer Ed

Dear Consumer Ed:

I am shopping for a new refrigerator, and many of the ads I read say 50% to 90% off. It seems like everyone has the same deep discounts.  What’s going on?

Consumer Ed says:  

Oftentimes, a retail seller will induce a buyer to purchase one of its products by comparing that product’s advertised sale price with some prior or existing reference price in a way that leads the buyer to believe that by purchasing from that specific seller he or she is saving the difference between the reference price and the advertised sale price.  Consequently, so-called “comparative pricing” can be a powerful advertising tool, and when coupled with the seller’s own incentives to maximize sales (and the prospective buyer’s desire to obtain a bargain), it may provide the seller with power to take advantage of consumers.

In response to these concerns, federal and state legislators have enacted deceptive pricing statutes that essentially prohibit sellers from advertising their products’ prices in ways that may mislead a buyer.  Generally speaking, it is deceptive for a seller to compare sale prices with some other reference price unless the seller can somehow show that the reference price is bona fide.  If, in fact, the reference price is the actual, bona fide price at which the article was offered to the public on a regular basis for a substantial period of time, this provides a legitimate basis for the advertising of a price comparison, and the item being advertised is a true bargain. 

The advertised sales you are seeing regarding refrigerators may well be legitimate, but be cautious when you see sales with such deep discounts.  The best thing you can do to protect yourself from phony bargains is to do your own price comparing.  See what other retailers are charging for the same product, and thereby determine if the store is really offering you a great deal or not. 

Again, both federal and state laws prohibit retail companies from advertising discounts if the discounts are not legitimate.  If you believe that a particular store is deceptively offering discounts, please make a complaint to the Georgia Department of Law’s Consumer Protection Unit by calling  404-651-8600 or visiting www.consumer.ga.gov


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