Would this be fraud?
Mar 16, 2006 | 12:35 pm
#46
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Posts: 48
Originally Posted by bugger_not_plz
Old discussions of similar, but not identical, ethical and legal issues:
http://www.flyertalk.com/forum/showthread.php?t=474613
http://www.flyertalk.com/forum/showthread.php?t=7798
No offense, but a person who "work(s) for a retailer of high ticket items" will not know everything about what gets flagged as possible fraud. This is 2006. There are various scams related to high-ticket returns (and no, I am not going to say what those scams are) and there are things that can get a person flagged as a possible thief. If a person established a pattern of doing this, imagine that person trying to justify to someone why he was doing it, and what his real purpose was, and why he was just a goober and not a thief.
Even if a person's moral compass is off-kilter and the person doesn't see anything wrong with doing this, it's an absurdly silly thing to do.
http://www.flyertalk.com/forum/showthread.php?t=474613
http://www.flyertalk.com/forum/showthread.php?t=7798
No offense, but a person who "work(s) for a retailer of high ticket items" will not know everything about what gets flagged as possible fraud. This is 2006. There are various scams related to high-ticket returns (and no, I am not going to say what those scams are) and there are things that can get a person flagged as a possible thief. If a person established a pattern of doing this, imagine that person trying to justify to someone why he was doing it, and what his real purpose was, and why he was just a goober and not a thief.
Even if a person's moral compass is off-kilter and the person doesn't see anything wrong with doing this, it's an absurdly silly thing to do.
Someone told me that they bought and returned like crazy at an REI store because they didn't really know what they need and because the sales people encouraged them to do so. After a while, they got a letter from REI telling them that may be they need assistance from sales people. Then a customer service rep at the store gave them a dirty look and said the store will soon not let them return anymore. Needless to say they stopped buying and returning and feel very much like a criminal.
My question is about the fllagging thing. Are they being flagged as a criminal or something less than that? Why? And will the store ever lift the flag? Or it's with attached to their account forever even after they only buy and not return?
Mar 16, 2006 | 12:44 pm
#47
Join Date: Sep 2005
Posts: 48
Originally Posted by bugger_not_plz
Old discussions of similar, but not identical, ethical and legal issues:
http://www.flyertalk.com/forum/showthread.php?t=474613
http://www.flyertalk.com/forum/showthread.php?t=7798
No offense, but a person who "work(s) for a retailer of high ticket items" will not know everything about what gets flagged as possible fraud. This is 2006. There are various scams related to high-ticket returns (and no, I am not going to say what those scams are) and there are things that can get a person flagged as a possible thief. If a person established a pattern of doing this, imagine that person trying to justify to someone why he was doing it, and what his real purpose was, and why he was just a goober and not a thief.
Even if a person's moral compass is off-kilter and the person doesn't see anything wrong with doing this, it's an absurdly silly thing to do.
http://www.flyertalk.com/forum/showthread.php?t=474613
http://www.flyertalk.com/forum/showthread.php?t=7798
No offense, but a person who "work(s) for a retailer of high ticket items" will not know everything about what gets flagged as possible fraud. This is 2006. There are various scams related to high-ticket returns (and no, I am not going to say what those scams are) and there are things that can get a person flagged as a possible thief. If a person established a pattern of doing this, imagine that person trying to justify to someone why he was doing it, and what his real purpose was, and why he was just a goober and not a thief.
Even if a person's moral compass is off-kilter and the person doesn't see anything wrong with doing this, it's an absurdly silly thing to do.
Someone told me that they bought and returned like crazy at an REI store because they didn't really know what they need and because the sales people encouraged them to do so. After a while, they got a letter from REI telling them that may be they need assistance from sales people. Then a customer service rep at the store gave them a dirty look and said the store will soon not let them return anymore. Needless to say they stopped buying and returning and feel very much like a criminal.
My question is about the fllagging thing. Are they being flagged as a criminal or something less than that? Why? And will the store ever lift the flag? Or it's with attached to their account forever even after they only buy and not return?
Mar 16, 2006 | 4:18 pm
#48
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There was a discussion on a NJ Radio station a while back how Target is not letting "Frequent Buyers and Returners" keep returning things. They are asking for DLs and if you are profiled you cannot return any more.
They also will only put the money back on the charge card it was charged against. SO you in efffect could not charge up a storm on a mileage earning cc and then return it on another cc.
Cheers
They also will only put the money back on the charge card it was charged against. SO you in efffect could not charge up a storm on a mileage earning cc and then return it on another cc.
Cheers
Mar 16, 2006 | 5:27 pm
#49
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Originally Posted by BigChair
Would it even work?
I'm new to this game, so please excuse me if this is a dumb question.
Suppose I were to make a purchase of $5k for furniture at a local store, and paid for it with my xxx airlines credit card, therefore earning 7500 miles. Then a few days later I changed my mind about the purchase, but had the refund credited to a different credit card (one that is with my primary bank). I could then just do an on-line transfer of the positive balance on my credit card to my checking account, and pay the xxx airlines credit card balance off.
Net result...no money spent, no interest paid, 7500 more miles.
FWIW, I work for a retailer of high ticket items, and we NEVER check to make sure the refund is going onto the same card that was originally charged...we only verify that's it is the same person.
So, what do you think?
I'm new to this game, so please excuse me if this is a dumb question.
Suppose I were to make a purchase of $5k for furniture at a local store, and paid for it with my xxx airlines credit card, therefore earning 7500 miles. Then a few days later I changed my mind about the purchase, but had the refund credited to a different credit card (one that is with my primary bank). I could then just do an on-line transfer of the positive balance on my credit card to my checking account, and pay the xxx airlines credit card balance off.
Net result...no money spent, no interest paid, 7500 more miles.
FWIW, I work for a retailer of high ticket items, and we NEVER check to make sure the refund is going onto the same card that was originally charged...we only verify that's it is the same person.
So, what do you think?
Mar 16, 2006 | 5:49 pm
#50
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[QUOTE=sany2]
oddly enough, that is not my quote.
It was as follows:
It is, in my opinion, certainly not illegal. Whether it is morally acceptable, only you can say.
btw, it isn't fraud, because you aren't deceiving anybody (unless their is a rule that the refund must be made to the credit card used for the purchase. If there were such a rule, you may be defrauding the business, but you are certainly not defrauding either credit card company or the airline.... at least not directly. Credit card company a still gets the money for the purchase and for the miles that the airline bought, credit card b gets the credit refund. The only problem would be the fees, which would still be charged to the merchant by credit card company a. I also have a feeling that the credit card company might not accept a refund credit from a store that never made a charge to the card.)
Don't know how that happened.
IT IS FRAUD!
Originally Posted by psyflyer
oddly enough, that is not my quote.
It was as follows:
It is, in my opinion, certainly not illegal. Whether it is morally acceptable, only you can say.
btw, it isn't fraud, because you aren't deceiving anybody (unless their is a rule that the refund must be made to the credit card used for the purchase. If there were such a rule, you may be defrauding the business, but you are certainly not defrauding either credit card company or the airline.... at least not directly. Credit card company a still gets the money for the purchase and for the miles that the airline bought, credit card b gets the credit refund. The only problem would be the fees, which would still be charged to the merchant by credit card company a. I also have a feeling that the credit card company might not accept a refund credit from a store that never made a charge to the card.)
Don't know how that happened.
Mar 16, 2006 | 5:50 pm
#51
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Originally Posted by alanh
I would have to wonder if the credit card company that gets a $7500 credit without any corresponding purchase will think. Large, unconnected refunds are usually signs of merchant fraud.
Mar 16, 2006 | 5:52 pm
#52
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Originally Posted by thesilb
That's right. I am a lawyer, and this is not fraud (as that term is used legally). I agree with dhuey, its morally dubious, but not illegal.
Mar 16, 2006 | 5:58 pm
#53
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Originally Posted by ILUVCITIBANK
A side comment to this, as a merchant who takes all major credit cards, I am not sure if I am legally or contractually required to only credit back to the form of card originally used, but as a practical matter we only credit back the exact same card. But can you guys believe as many as 2, or even 3 years ago, AMEX issued a T&C change that informed us that they would not longer refund discount fees w/ a refund or reversed charge ?
So, if I run an AMEX credit card for $1000 lets say...and I as the accepting merchant absorb the typical 3.00% discount, which I do ($30)....if the customer than changes their mind and returns product, and I refund the $1000 back to the creddit card...AMEX keeps the $30. How about this reprehensible practice ?
Anyone wonder why merchants don't like to accept AMEX products ?
Besides the extraordinarily-high discount fees compared to V and MC, AMEX's T&Cs are always onerous and one-sided.
Logically, this is why, from a reverse perspective, AMEX's affinity products *seem* to have much greater value than a given V and MC affinity product. If anyone ever studies the value of an AMEX-derived starpoint or an AMEX-derived HH point (earned at this ratio of 3:1 BTW), versus a visa or mc-derived affinity point or mile...no wonder AMEX inherently has the upper hand these days in terms of "VALUE", earned from such schemes as this one where they will not refund discount fees once they collect them, even if the charge is refunded.
Fraud by AMEX ? You be the judge.
So, if I run an AMEX credit card for $1000 lets say...and I as the accepting merchant absorb the typical 3.00% discount, which I do ($30)....if the customer than changes their mind and returns product, and I refund the $1000 back to the creddit card...AMEX keeps the $30. How about this reprehensible practice ?
Anyone wonder why merchants don't like to accept AMEX products ?
Besides the extraordinarily-high discount fees compared to V and MC, AMEX's T&Cs are always onerous and one-sided.
Logically, this is why, from a reverse perspective, AMEX's affinity products *seem* to have much greater value than a given V and MC affinity product. If anyone ever studies the value of an AMEX-derived starpoint or an AMEX-derived HH point (earned at this ratio of 3:1 BTW), versus a visa or mc-derived affinity point or mile...no wonder AMEX inherently has the upper hand these days in terms of "VALUE", earned from such schemes as this one where they will not refund discount fees once they collect them, even if the charge is refunded.
Fraud by AMEX ? You be the judge.
Mar 16, 2006 | 6:14 pm
#54
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Here is the American Dictionary definition:
fraud (frd)
NOUN:
A deception deliberately practiced in order to secure unfair or unlawful gain.
A piece of trickery; a trick.
One that defrauds; a cheat.
One who assumes a false pose; an impostor.
I'm sorry to the lawyer that thinks "fraud" is only a legal term, it is not. It is as stated above. You will be deliberately practicing a deception in order to secure UNFAIR gain. And as such would be a "CHEAT". You are costing the business a percentage of the transaction and a transaction fee when you make the purchase. You are costing the business another transaction fee when you return it. You are costing the bank a percentage to one of the credit card associations. If you do this, and they let you, the employee just violated the T&C of the credit card agreement. You just violated your T&C of your credit card agreement. Just because you could be killed and ground up in a meat grinder, cremated, and your ashes sprinkled in the south pacific and the perpertrator never gets caught does not make him innocent!
fraud (frd)
NOUN:
A deception deliberately practiced in order to secure unfair or unlawful gain.
A piece of trickery; a trick.
One that defrauds; a cheat.
One who assumes a false pose; an impostor.
I'm sorry to the lawyer that thinks "fraud" is only a legal term, it is not. It is as stated above. You will be deliberately practicing a deception in order to secure UNFAIR gain. And as such would be a "CHEAT". You are costing the business a percentage of the transaction and a transaction fee when you make the purchase. You are costing the business another transaction fee when you return it. You are costing the bank a percentage to one of the credit card associations. If you do this, and they let you, the employee just violated the T&C of the credit card agreement. You just violated your T&C of your credit card agreement. Just because you could be killed and ground up in a meat grinder, cremated, and your ashes sprinkled in the south pacific and the perpertrator never gets caught does not make him innocent!
Mar 16, 2006 | 10:43 pm
#55
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Originally Posted by drbond
Here is the American Dictionary definition:
fraud (frd)
NOUN:
A deception deliberately practiced in order to secure unfair or unlawful gain.
A piece of trickery; a trick.
One that defrauds; a cheat.
One who assumes a false pose; an impostor.
I'm sorry to the lawyer that thinks "fraud" is only a legal term, it is not. ...
fraud (frd)
NOUN:
A deception deliberately practiced in order to secure unfair or unlawful gain.
A piece of trickery; a trick.
One that defrauds; a cheat.
One who assumes a false pose; an impostor.
I'm sorry to the lawyer that thinks "fraud" is only a legal term, it is not. ...
[QUOTE=psyflyer]
Originally Posted by sany2
...So is it fraud? Whether directly or indirectly fraud is fraud.
I'm no lawyer, but frankly the OPs scheme is certain to be classified as fraud or a derivative thereof. (period)
I'm no lawyer, but frankly the OPs scheme is certain to be classified as fraud or a derivative thereof. (period)
Originally Posted by freakflyer
Of course its fraud - against bank number 2. They will end up eating the interchange rate (e.g., if the store pays 3% for the card and you charge $1,000 on card 1 but return it to card 2, the supplier is whole but bank 2 will only get back $970 and have to pay you $1,000). Sounds like theft to me. Let alone the cost of the item that you have to return if the seller has to resell it as used.
Mar 17, 2006 | 9:13 am
#56
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Originally Posted by drbond
Yes, we do and we freeze the merchants account immediately. Sometimes they no longer get money transferred to them for any transaction for up to 6 months.
Mar 18, 2006 | 9:09 pm
#58
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Originally Posted by BigChair
Would it even work?
I'm new to this game, so please excuse me if this is a dumb question.
Suppose I were to make a purchase of $5k for furniture at a local store, and paid for it with my xxx airlines credit card, therefore earning 7500 miles. Then a few days later I changed my mind about the purchase, but had the refund credited to a different credit card (one that is with my primary bank). I could then just do an on-line transfer of the positive balance on my credit card to my checking account, and pay the xxx airlines credit card balance off.
Net result...no money spent, no interest paid, 7500 more miles.
FWIW, I work for a retailer of high ticket items, and we NEVER check to make sure the refund is going onto the same card that was originally charged...we only verify that's it is the same person.
So, what do you think?
I'm new to this game, so please excuse me if this is a dumb question.
Suppose I were to make a purchase of $5k for furniture at a local store, and paid for it with my xxx airlines credit card, therefore earning 7500 miles. Then a few days later I changed my mind about the purchase, but had the refund credited to a different credit card (one that is with my primary bank). I could then just do an on-line transfer of the positive balance on my credit card to my checking account, and pay the xxx airlines credit card balance off.
Net result...no money spent, no interest paid, 7500 more miles.
FWIW, I work for a retailer of high ticket items, and we NEVER check to make sure the refund is going onto the same card that was originally charged...we only verify that's it is the same person.
So, what do you think?
Mar 19, 2006 | 11:43 am
#59
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Originally Posted by BigChair
Would it even work?
I'm new to this game, so please excuse me if this is a dumb question.
Suppose I were to make a purchase of $5k for furniture at a local store, and paid for it with my xxx airlines credit card, therefore earning 7500 miles. Then a few days later I changed my mind about the purchase, but had the refund credited to a different credit card (one that is with my primary bank). I could then just do an on-line transfer of the positive balance on my credit card to my checking account, and pay the xxx airlines credit card balance off.
Net result...no money spent, no interest paid, 7500 more miles.
FWIW, I work for a retailer of high ticket items, and we NEVER check to make sure the refund is going onto the same card that was originally charged...we only verify that's it is the same person.
So, what do you think?
I'm new to this game, so please excuse me if this is a dumb question.
Suppose I were to make a purchase of $5k for furniture at a local store, and paid for it with my xxx airlines credit card, therefore earning 7500 miles. Then a few days later I changed my mind about the purchase, but had the refund credited to a different credit card (one that is with my primary bank). I could then just do an on-line transfer of the positive balance on my credit card to my checking account, and pay the xxx airlines credit card balance off.
Net result...no money spent, no interest paid, 7500 more miles.
FWIW, I work for a retailer of high ticket items, and we NEVER check to make sure the refund is going onto the same card that was originally charged...we only verify that's it is the same person.
So, what do you think?
Since the retailer pays a cost to the CC issuer they are loosing money on this. For customer service it is allowed but if you did it too often it would probably not work out for you. But I suppose 1 or 2 a year like this would probably not be a huge deal.
