I hate having to dispute charges with the CC company because I don’t like the idea that the merchant gets stuck with the bill, but I have done it on a few occasions where I felt like I had absolutely no recourse. I recently had to do this with one of those gigantic furniture warehouse places. I paid full retail price + delivery and setup changes for a bed. The guys came and set up the bed, but it had some greasy smudges all over the headboard and some other ones issues I can’t recall, so I called to complain and they basically gave me the runaround and said there’s nothing we can do because I didn’t reject the item right away and that it was only cosmetic. I wasted my time begging and pleading with store management and their customer satisfaction department, but there was never any real resolution. In the end they offered me a $100 gift certificate towards my next purchase. I felt insulted and exhausted at that point and kindly informed them that I would be doing a chargeback. “ok”, they said. The next day I got a credit for the full cost, which IIRC was about $900. I honestly felt horrible for doing that because I essentially got the bed free. I suppose the company’s policies simply didn’t allow them to actually do the right thing and fix or replace the bed. Perhaps it was simply less costly for them to eat the coat of a chargeback instead of paying someone to fix the problem or replace it due to labor and other costs.

Some of the chargebacks get eaten by the merchant, and some get eaten by the credit card company’s “satisfaction guarantee” (which is accounted as a form of insurance).

Rational? Maybe for them. But when they refuse to help the consumer, it’s the customer’s right to issue a chargeback. That’s their purpose: to deal with bad merchants. Too many chargebacks can get you dropped from your payment processor. But when the merchant bans you to hide the fact that they suck (from the processor), that’s pretty messed up.

> It's a consumer being able to unilaterally say "give me my money back" and the merchant basically being stuck with the tab.

That's not even remotely true. The merchant absolutely has the ability to dispute chargebacks.

Yes, but the bank takes the money immediately after accepting the chargeback. The merchant can provide evidence and dispute it to get their money back, but it is immediately withdrawn. And, if I’m remembering correctly, along with a fee.

Assuming the merchant is 100% honest and accurate, yes this is rational. If the merchant is error-prone and doesn't want their occasional erroneous (or intentional) overcharges affecting their relationship with credit services, it's also rational.

The credit card company is the one that holds the power I guess. I wonder if someday visa will start threatening merchants who retaliate via bans as an extra card feature.

Previously, Visa(?) had tried to prevent merchants from having separate cash and debit/credit prices (gas stations for example), and they got in trouble with “monopoly laws”. So I wouldn’t hold my breath on them retaliating on merchants who ban customers.

It's not a guaranteed refund. It's just another dispute resolution, but done by the card issuer rather than the merchant.

Often they will side with the consumer and will refund the charges through their various policies, but they also investigate the case and will let the payment go through if there's no actual problem found. There are plenty of cases where consumers didn't even contact the merchant at all and yet still chargeback.

I think most chargebacks are by fraudsters and carderz.

> It's a consumer being able to unilaterally say "give me my money back"

That is actually not true. The credit card company must follow established guidelines and pragmatically look at the available information/user agreement/contract and decide on whether there was a breach of contract. They can not blindly stick the bill to the business.

Merchants can appeal. And if they do, you can be out of luck - they can lie that they did provide you with a service, and you won’t have access to any of their statements to respond to them. It’s many months long process but possible.

Source - happened to me. Ended up relationship with both the merchant and credit card company. And have $2k less in my wallet.

> It's a consumer being able to unilaterally say "give me my money back" and the merchant basically being stuck with the tab.

The merchant is stuck with more than the tab. There's also a chargeback fee, which can range from around $15 to several times that depending on who they use for payment processing.

> Doing a chargeback means the relationship between consumer and merchant is ineffective that they can't resolve their differences normally.

Sometimes it means that the customer didn't even try to resolve the dispute. At one place I worked we always gave a refund when one was requested, with no hassle. Some customers, though, would not ask. They would go straight to chargeback.

I think that because some companies make it a major hassle to get them to issue a refund, some consumers try to do a chargeback first and only call the merchant if the bank requires them to try to settle the issue directly first.

> Some customers, though, would not ask. They would go straight to chargeback.

I was always under the impression that if consumers did this sort of thing too often it would end up hurting them because the CC company would start to flag their account.

Sort of an algorithmic version of "If you run into an asshole in the morning, you ran into an asshole. If you run into assholes all day, you're the asshole."

maybe if chargebacks are so bad try to invest in better dispute resoluton processes

No this actually puts the merchant and customer on equal footing. The card company has an incentive to please both sides.