_Hertz_ messed up the rental dates on their end of the transaction (by multiple days, even) and would not allow me to modify or cancel the rental. I ended up disputing the charge with Expedia via an AmEx chargeback and lost.
AmEx owns 10% of Expedia.
The reason car rentals provide the convenience of charging your credit card without the immediate authority of you reviewing the charges is a feature of credit cards over cash, and a benefit to consumers. The other feature is that you can dispute those said charges if the merchant is also charging you for services/goods you never received (e.g., gas for an EV).
A business can sue a consumer for not paying.
They are two sides of the same coin.
Most complaints are people who don't pay with CC are paying a premium.
Huh? You mean in the example scenario if I charge $500 for a car rental and get 2% cashback from my CC. I find out the car rental is charging me an extra $100 for gas that I never used. I'd complain because I'd lose out on the 2% * $100 difference for the $100 that my CC company gave me back as a result of the dispute charge?
I was responding to this.
I also don't understand after re-reading where the "extra ~3%" comes from. If I go to the store and spend $100 on my CC, I'll get $2 cashback. I can pay the $100 off immediately with no interest for a savings of 2%. How are they getting 3% extra from me?
I know I get at least 2% back on all purchases and sometimes more depending on the card and category.
This is also why I brought up that usually I hear people who pay in cash get overcharged - they pay the full $100.
(leaving out how credit card fees require merchants to increase prices leading to even more expenses for cash buyers)
FYI - For people who work in payments, they know it's not as simple as this, but the point is that there is a delta between the two, and it does help pay for both of the convenience AND the ability to dispute.
"pays it" is relative. The merchant is generally charging 3~6% more than they would otherwise if they didn't use a CC. Said differently, assuming all other things equal, buying the same good for the same price from two identical stores, one who only accepts CCs and one who accepts cash, the one who accepts cash will profit more. Therefore they can, in theory, charge less for their good.
> being cheaper for the CC holder due to cashback
"cheaper" how? The spread is effectively paid for by the merchant (their processing fee is 99% of the time higher than the cashback bonus a consumer earns) which in turn goes to vendors (like credit card providers, payment processors, etc) who then allocate costs against things like customer service for charge disputes.
EDIT: The spread is the original ~3% I'm referring to, which would be an average 1.5% cashback against a 4.5% payment processing charge for a delta of 3%. In many cases this is lower (or null) but you get the point.
The only way I see the extra 3% for cardholders is because they are "forced" to shop in card-accepting establishments which will have higher costs to cover fees while the cash user can choose the cheaper cash vendor.
At a point in time basis, you are correct.
> The only way I see the extra 3% for cardholders is because they are "forced" to shop in card-accepting establishments which will have higher costs to cover fees while the cash user can choose the cheaper cash vendor.
Correct. And my point is that this 3% tax gives you the feature to dispute the charge.
It's a belief held by people who don't actually try to use these systems. Major credit card companies aren't in the business of consumer protection.
Many times I've tried to do chargebacks, only to be denied by the card issuer with some unsubstantiated claim by the vendor that they held up their end of the transaction. No recourse short of spending four or five figures on a lawyer and a lawsuit. As a result, if they cheat you out of less than $5k, they win.
It could really fuck a company's day up if several hundred to thousand people across the world decides to seek redress from a small claims court on the same day.
That said, just because there’s an arbitration clause in the contract doesn’t mean you’re absolutely stuck. You can hire a lawyer and try to get out of it. They’re trying to keep you from doing something like that.
At this point fixing it requires congressional action.
See https://arbitrationinformation.org/docs/problems/ and https://arbitrationinformation.org/docs/solutions/ for my complete writeup.
Now the company has to pay one of their lawyers ($$$) to show up, or the claim is a default judgement, which they have to pay.
So the lawyer shows up and says blah blah mandatory binding arbitration. The judge can interrupt and say "don't care, judgement against, pay the man". Or the opposite, in which case at least you cost them more than they cost you.
Which is why they probably take the default judgement and pay you.
So multiply that across even a few hundred times...
Still takes time, and arbitration isn't all that scary, ao forcing them to arbitrate can also be a costly endeavor for them.
Bear in mind that motions and discovery are highly frowned upon in Small Claims courts that I've litigated in. And 95% of the time the court will rule in favor of the bigger party if they bring a lawyer, just out of general hatred of courts for unrepresented litigants.
Did you really? Monetarily you did of course. How much time does it cost you though? It might cost the company a couple hours.
JAMS just updated their "minimum standards" for consumer arbitration as of May 1, 2024, and they now seem to allow for transfer to small claims court.[2]
[1] https://adr.org/sites/default/files/Consumer_Rules_Web_0.pdf
Not only they could not tell me in advance how much it was going to cost, but also everything in the final invoice was abbreviated and laid out in a nonsensical way. I tried summing the values in every possible way, and it never got to the total they charged.
I'd be absolutely pissed if it was my money.
Funnily enough, rented from the same company in Germany, and the experience was completely different. Clear value, fees, easy to understand invoice.