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Ely
Ely, Counselor at Law
Category: Legal
Satisfied Customers: 100033
Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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There are students that have registered at a dance studio in

Customer Question

There are students that have registered at a dance studio in the state of Oregon for lessons and requested refunds and disputed the credit card transactions since they changed their mind and either did not show up for class or decided they didn't want to go. The studio has an all sales final poilcy: no refunds, no exchanges, no exceptions.This policy is posted at the studio as well as through their online registration software. It's also posted on the businesses website. The students have electronically signed this agreement and some have also signed a paper regsitration booklet in addition. Even with this policy the studio has gone out of their way to offer for them to take lessons at another time (as a faith of good will) and they insist on a refund only. What can the small business do legally at this point? And how should they handle these chargebacks to ensure they win?
Submitted: 1 year ago.
Category: Legal
Expert:  Ely replied 1 year ago.
Hello and welcome to JustAnswer. Please note: (A) This is general information and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms; and (B) the site allows experts not participate in phone calls and I may or may not be able to participate in this feature.
I am sorry to hear about this. At this point, have any disputes been WON? Has the business REPLIED to any disputes with the merchant company, or not?
This is not an answer, but an Information Request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.
Customer: replied 1 year ago.
Nothing has been won at this time. The merchant account has been trying to pull the disputed amounts from the bank account (while reviewing the cases) and the bank rejects it and charges the business a fee each time ($30 I think). One student contacted the BBB to lodge a complaint and all others are either hounding the business by phone, email or disputing the credit card charge. Any responses given by the studio have been to explain the no refund policy and offer to exchange the amount to another class but the students are unwilling and insist on their money back. We have not replied to the merchant company as of yet as this is my first time doing this and I wanted to make sure I knew what legal avenues the students and the company have.
Customer: replied 1 year ago.
As of now, there are several chargebacks around $12,000 ish. The small business is not in the position to offer refunds.
Expert:  Ely replied 1 year ago.
Thank you.
Let us handle one action at a time, because they are separate.
REQUESTS FOR REFUNDS
The contract controls here. If the parties want a refund, they cannot get one unless the contract allows it. So citing the contract, the dance studio may simply say "sorry, but no." It DOES NOT HAVE to accommodate. It DOES NOT HAVE to refund. Period.
The only way a student can practically get a refund is if they file a suit, allege and prove breach of contract and/or negligence or something akin to this, and get a judgment.
Otherwise - no.
MERCHANT CHARGEBACKS
A lot of people think they can simply charge back money whenever they want. Not so. In fact, the merchant account company does not care about the issue behind the charge back. All they care about is AUTHORIZED or UNAUTHORIZED charge. If authorized, it stays. If unauthorized, it may be voided.
The contract shows it being authorized. If a dispute comes, the dance studio wants to send a short and sweet response (timely) with a full copy of the contract with the no refunds clauses and signatures highlighted. The dispute should then be dropped by the merchant account company in vast majority of cases.
COMPLAINTS
Finally, any complaints or reviews online that are FALSE - that go beyond opinion and into simply false accusations - may be the basis for a defamation suit against the person making them. People seem to think that they can blackmail/bully businesses by false/fake/exaggerated online reviews and complaints. I call this bullying, and it is generally also civilly actionable under defamation.
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