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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39045
Experience:  Retired (mostly)
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I just returned merchandise to a merchant and he told me he ...

Customer Question

I just returned merchandise to a merchant and he told me he would send a check in the full amount. I just received the check today and it was for 30% less than what he told me it would be. Would I be able to cash the check that he sent and then file a chargeback on my credit card for the rest of the amount if he does not agree to sending the rest of the money?
Submitted: 9 years ago.
Category: Business Law
Expert:  socrateaser replied 9 years ago.

Depends. If the check states "full payment" or "full satisfaction" or "payment in full" or the like then the merchant is attempting to tender an accord and satisfaction check, which if cashed would finally and fully resolve the dispute between you and the merchant (UNLESS you are in Oregon, where the rules have been modified by statute).

If you believe that you can successfully win a CC dispute, then you may be better off filing the dispute for the full amount before attempting to cash the check -- tell the CC issuer that you were given a check for 70% of the transaction amount and see if the merchant suddenly produces a "restocking charge" agreement that you purportedly were held to. May be a good idea to state in your dispute letter that you were not informed at any time, nor was there anything displayed at the merchant's establishment concerning any restocking or other restrictions on returns.

Customer: replied 9 years ago.
Reply to socrateaser's Post: I was contacted by an attorney that represented the manufacturer of the items the seller sold me and they told me that I was unable to resell these items because I was not an authorized reseller. I contacted the seller and he told me to send the items back and to leave his name out of the equation and that if I did he would issue a full refund. I am worried that if I do not cash the check now, and tell him to either issue the full refund or I will issue a charge back in the full amount that he will cancel the check and that I will be out of the full amount. On the "For" line of the check all that it says is 25/fe? Not sure what that means?
Expert:  socrateaser replied 9 years ago.

Okay, so it appears that your contract with the seller was based on your understanding that you would resell the items, and it turns out that you cannot. So, the contract itself is the product of a mutual mistake of a basic and material fact, which the reseller should reasonably have known about and which would entitle you to rescind the entire contract by returning the merchandise.

I think you're on pretty solid ground here for a full refund, because the seller should never have sold you the goods in the first place -- which is why he wants his name left out of it.

You're not going to be able to get any sort of relief from the credit card company if the seller refuses to deal, because the Federal Truth in Lending Act only applies to "consumer" transactions -- not to commercial transactions. So, the credit card issuer can just say "tuff luck" to you. Not saying that will happen -- but if it does, you're stuck.

You can't tell the seller that if he doesn't pay the rest of the dough that you'll tell the manufacturer what's up, because that is extortion (criminal). All you can do is tell the seller that if he doesn't pay the remaining money, you will be forced to sue for the difference.

The "25/fe" means nothing to me -- it certainly doesn't indicate an accord and satisfaction check. I don't really know what it means. But, you can call up the seller and ask...

Customer: replied 9 years ago.
Reply to socrateaser's Post: Would it be a safer bet to cash the checks, then mention that I would be issuing a chargeback for the remaining balance?

I would like to document something in writing by sending him an email.

This is what I plan to write -- I will definitel be paying you the amount stated! Sorry for the extensive response. The amounts have been replaced with $xxx and the name of goods has been replaced with "items". also the company I am referring to was replaced with "Company A"

Thanks so much for your help!

Mr ... :

I just received the check in the mail, but there is a huge problem. Is this the first installment of my refund?

The total amount requested for the refund was ---

$xxx x 6,650 items
$xxx x 1550 items.
$xxx Total Requested for Refund.

I received a check for $xxx. I am curious as to when I will be receiving the other $xxx? This was a generous offer on my part becuase I did not include the shipping fees from you sending these to me, nor did I include the google checkout fees or the APR that was tacked on my account from my AMEX credit card (9.99% broken out daily over the past 30 days equals over $100).

Perhaps I am just better off issuing a chargeback in the full amount to my credit cards?

From my google checkout invoices --
$xxx x 6,650 items = $xxx
$xxx x 1550 items = $xxx
$xxx x Total should have been refunded.

Plus, this does not account for me having to hire an attorney because of this situation and I left this out of the picture entirely. --- hired an attorney to see what to do when the manufacturer contacted me ---

You asked me not to mention your name to "Company A" which really sounds shady to me, but I left your name out of the situation from the beginning becuase I thought you would handle this as a business man. We have done business together for over a year now and I thought you would handle this amicably. From the beginning you told me that I would make good money on these on ebay and you never once asked if I was an authorized dealer. You mentioned on the phone to keep your name out of this because you were worried about losing your license with "Company A"? I did not do anything wrong in this situation. Why would you be worried if you did not do anything wrong? As a buyer I was not in the wrong, you were by selling these cards to me. You can not charge me a restocking fee for something that was in your fault.

You also told me that 500 additional items were not included which is 100% not true. There were 500 items missing from the original package you sent me and 15 missing pins which I paid for. I did the calculations manually myself to account for the weight of the packages that I sent you and minus the boxes weight, there would be exactly 6,150 items (this was minus the 500 items you forgot to include with the original shipments). I counted out those items with my brother -- he counted them, then I counted them to assure something like this would not happen and I wrote down the items that were included in each box -- 1,150 items in total (I included note of this in each box). The 2 other boxes were never opened and you were quoted as saying they definitely have 2,500 items in each box.

Please let me know what you plan to do about the other $xxx as initially proposed.


Expert:  socrateaser replied 9 years ago.


If you want a thorough review of your letter, you MUST retain an attorney in your jurisdiction. That said, you should be very careful not to imply some threat in your letter if the merchant does not pay you back. That could get you arrested for extortion.