Backing Out of Impulse Buying
You’re standing in line at the grocery store with your 12-Items-or-Less. The person ahead of you is arguing with the cashier, so you look away. Something bright and sparkly catches your eye:
‘Watermelon-rhubarb bubble gum’? Seriously? How weird is that?!
Just as the cashier starts reaching for your groceries, you grab a pack and drop it on the conveyor belt.
You’re already back in your car before you stop and realize you don’t even LIKE watermelon. Or rhubarb. Or chewing gum, for that matter. What were you thinking? Still, it’s no big deal. Sure, you feel a little foolish, but it was only a dollar, right? You shake your head, laugh at yourself, and move on.
Impulse Buying Comes in All Sizes
Impulse buys: those last second, unplanned purchases that happen right before you check out. Everyone does it, and retailers know how to trigger the necessary response. According to a creditcard.com report, five out of six Americans say they’ve made impulse buys.
But what if it was something bigger than a pack of gum—a pair of designer shoes, for example, or a compound miter saw? That same report shows that over half of those impulse buyers spent at least $100, with another 20% admit to impulse purchases of $1,000 or more.
You get home and realize the shoes don’t go with anything you own, or you have no place to set up the saw. You feel foolish, but now it’s a lot harder to dismiss: we’re talking hundreds of dollars, not just a buck. What do you do when buyer’s remorse sets in?
Take It Back. Or Don’t.
The most obvious answer is to simply return the item to the store. But sometimes this isn’t an option for various reasons. Maybe the item was on clearance and non-returnable, or you dropped or otherwise damaged it accidentally. More often, however, the reason for not returning an item is more basic: embarrassment. No one likes to admit they did something dumb.
You can keep the item—stuff it in an attic or closet and tell yourself you’ll use it later—but you’re still out the money, or you can suck it up and take it back. Both options come at a price, and neither idea is appealing.
There is a third choice, but it really shouldn’t be considered an option: a credit card chargeback. More and more, consumers are taking advantage of what appears to be painless way to have one’s cake and eat it, too.
Customers do this to get their money back without the need to make a return—from that view, it’s a perfect solution. The reality is a little more complicated than that, though.
Chargebacks Hurt Merchants…
A chargeback is not the same as a refund, and there are moral and financial implications for using it that way. For starters, it’s a form of theft: a chargeback does not require the consumer to return the merchandise in question. You get your money back and still get to keep the item while the merchant gets nothing—that’s not fair by any definition.
It gets worse: not only does the seller lose money and merchandise from a chargeback, they are hit with fees and penalties for even getting the chargeback in the first place. If the merchant is doing something to earn a chargeback, that’s one thing; if it’s simply a matter of convenience for you, that’s considered fraud.
Credit card fraud costs merchants billions each year. A 2016 report estimated that every dollar merchants lose to fraud costs them $2.40 in revenue. $100,000 lost to fraud in a year could cripple a small business, especially since it ends up costing nearly a quarter of a million dollars at that rate.
… and They Could Hurt You, Too
Merchants aren’t the only ones hurt by illegitimate chargebacks: there are practical reasons why you should avoid chargebacks if possible. For one thing, the process isn’t as straightforward as it sounds. It’s usually done over the phone, but can require long wait times and lengthy question-and-answer sessions that may have you scurrying through the house to uncover receipts and other necessary documentation.
And under certain circumstances, chargebacks can cost you more than the merchant: if you’re charged with “friendly fraud,” it can run you $400 or more in fees and penalties, according to MasterCard. Too many unwarranted chargebacks could also mean losing your account and long-standing damage to your credit.
Chargebacks: The Last Resort
Chargebacks are not harmless. They serve a function, certainly, but only when a truly unauthorized charge has been made. The system wasn’t created to save consumers a little embarrassment over an impulse purchase. Fraudulent chargebacks cost merchants, and they can cost you as well.
Now we’re back to the same question: what to do about that unwanted impulse buy? We encourage you to go ahead and return it to the store, if you can. But if you still have trouble, contact us at Chargebacks.ie for further assistance. We can help you secure a refund, cancel recurring payments, or challenge cases of criminal fraud—without resorting to chargebacks. Talk to us before you file.