Top gadget shop Newegg.com is holding a woman’s account hostage until she gets her brother to reverse a chargeback. From The Consumerist:
When she tried to place an order using her own name and credit card number, but with the same shipping address as her brother, her account was suspended. Jenn figured she could resolve the problem with a conversation or two with Newegg’s customer service department, but as you’ll see from the transcript below, Newegg’s CSR blatantly says Jenn’s account won’t be approved until her brother reverses his chargeback.
Who needs a collection agency when you can put the screw on family members? It even told her his account number and other personal details when she contacted them. The plot thickened, however, when she filed a Better Business Bureau complaint. Newegg blew it off–a stunning act for an online retailer–now asserting that her address is blacklisted in perpetuity.
Perhaps Newegg suspected a scam was afoot, given the same last name and the same address. But what kind of fraudster files reports with the BB? If the address had been blacklisted years earlier, as Newegg claimed, how was her brother able to order something to later issue a chargeback on?
It’s particularly interesting because of Newegg’s halo of propriety: it built a reputation on not behaving like other thin-marging online catalog stores. It’s been my main gadget-supplier for years. Is there a word for when a retailer Jumps the Shark? Overstocked, perhaps?
Newegg.com Holds Woman’s Account Hostage Until She Gets Her Brother To Reverse Chargeback [Consumerist]
Did anybody (besides the “sister”) contact Newegg about this story?
IANAL, but what Newegg did sounds like a violation of their privacy policy, if they’re operating under California jurisdiction it’s a criminal violation; This is not to mention that if they’re both adults, they’re legally entirely separate entities even if they reside at the same address.
I wonder how NewEgg would deal with one conclave of Sikhs I know of, who all have the same last name (Singh!) and all reside in a single neighborhood and sometimes in the same large Victorian-style former-boarding-house for community reasons.
WTG, NewEgg! Fire that lawyer that approved that egregious tactic.
It now occurs to me:
I’d be willing to put $20 US on a bet that her address is on a list maintained by the United States government as a Terrorist watch list.
It /smells/ like it – especially the “blacklisted until the end of time” part.
Eh, MC/Visa rules will come out in Newegg’s favor on this one, even if it seems a little unfair to the sister.
If Newegg has proof of 3 of these 4 things:
Same last name
same address
correct AVS (matching zipcode to address given basically)
proof of delivery (Fedex/UPS/DHL/USPS tracking number)
the chargeback will be reversed in Newegg’s favor. Newegg doesn’t isn’t required to sell to anybody, and as far as their concerned, the brother and sister has the same last name and same address, So according to the rules they might as well be the same person. Not only is she not going to get her memory card, the brother will have the cost of his purchase re-deducted from his account at some point. Maybe it’ll even screw him and overdraw his account.
I would say that Newegg is on top of it’s game here with their fraud prevention. It’s being proactive like this that keeps their prices down, each chargeback costs a company ~$35 in processor fees, even if they win the dispute on the first go-round. If it goes to Visa/MC arbritration it costs ~$150+ per case, no matter the outcome. I’d be concerned about selling to someone with the same last name at the same address too, and probably wouldn’t if I was Newegg.
Being a small business owner that’s dealt with this sort of thing, there’s no way in hell I would ship to the same address, same last name, after having a charge-back. Why should I? Name one good reason to trust someone if I was ripped off by the same household before?
She should just suck it up and order from somewhere else. It’s not that big of a deal.
Would you hang on to her money for a week before making that decision and then create some strange story about previous residents of the address?
Something’s not right here. Newegg seems to have changed their story numerous times throughout the story. First, it was about the brother; then, no, it was the address itself? I chuckled at the “So, if you just move, we’ll be happy to do business with you.” On the other hand, no explanation of the brother’s chargeback. Several commenters here seem to have assumed it was a fraudulent chargeback.
The purpose of the chargeback system is to protect customers. I recently came very close to issuing one against a company that claimed to have shipped a product to me that never came. It is telling that when I asked for a tracking number for the phantom shipment, I got no reply at all. Luckily, I called back later and they intimated that the previous customer service rep I was dealing with had been fired and said that my earlier inquiry had been flagged as “resolved.” So, it worked out for me, but a chargeback for a product never shipped would have been perfectly justified.
The larger issue here (and earlier posts) seems to be the chargeback system itself. If retailers are so opposed to the system, they need to work that out with the credit card companies and leave the customers out of it. Might it currently be a source of fraud and abuse? Sure. But some retailers seem to be working from the assumption that any use of the system is an attempt at fraud. The credit card companies should be up in arms about that as it threatens to degrade an important service they offer to their customers.
I’d have to side with Newegg on this one. They have to employ CYA just like the rest of us.
Newegg does have thorough procedures for fraud prevention. A few years ago an order I placed for a laptop was canceled because I placed it from outside the US–even though I used my US credit card and asked for it to be shipped to my US address.
When I called to ask them why the order was canceled, they were actually quite quick to authorize the order, and they upgraded it to 3 day shipping for free.
Wow. This is such a shame. I love, or rather used to love, Newegg. They were always so polite and helpful with any issue. Now this? Newegg was the last bastion of pleasant and painless internet shopping for me.
Now where do I shop?
I know the kneejerk reaction is to blame the corporate entity when a consumer complains, but I think Newegg deserves the benefit of the doubt on this one. I will take the word of one of the most well-respected online retailers against some anonymous person with a fishy story. This certainly wouldn’t be the first time someone has contacted the Consumerist with a trumped up story to get sympathy; does anyone else remember the “dusty PS3″ incident?
Also, Newegg has the right to refuse service to anyone for any reason. I wouldn’t blame them either if a family member at the same address just defrauded them.
Jenn’s story is fishy.
She calls Newegg and asked them why her account was suspended. They explained that there was a chargeback at the same address, by another person living in the same house as her. They tell her that this person shares her last name, and then gives her his name. She complains that Newegg giving her her brother’s name is a violation of “the privacy act”. I am sure if Newegg did not give her his name, she will be complaining “how am I supposed to find out who this other person is if they refuse to name him?”
The way she tells the story, it sounds as if she is not on speaking terms with her brother. She’s saying, “whatever he does, it’s got nothing to do with me”. Well, OK. But so long as you’re still living in one house, the world is not going to look at it that way. She must understand the seller’s point of view. She does not say what was the cause of the previous charge back. Perhaps her brother was scamming Newegg. Or she has a little sister who is charging things to the credit cards of other people in the house. But whatever it was, it’ll be silly for Newegg to ship something else to that same address.
#2, bardfinn, the last name is pretty unimportant. They flagged it based on the credit card and delivery address. Even if you share Jenn’s last name and lives in the same city, Newegg will still sell to you. However, if I were to have the misfortune to have a scum of a housemate who has scammed countless online stores, I’ll understand why they will not want to send to that same address again. I’ll use my office address instead.