Credit Card "abuse" by online provider/s

I recently signed up to purchase some items from Woolworths online (an Ozbargain deal of course), essentially to ensure I didn't miss out on the bargain being offered in stores where stock is almost always extremely limited on sale items (another issue). It turns out that their "system" involves no more than the nearest local supermarket providing the goods, so my idea that the online store has separate stock was wrong, but that's not the point of this complaint.

The issue is this. Today I received advice that they were "temporarily out of stock" and only 1 of the 3 items I ordered was subsequently delivered (no problems there, it happens and sometimes demand exceeds supply - at least temporarily). HOWEVER, when taking the order they had already debited my credit card for the full amount, and had now instigated a refund which would "take up to 3-5 business days" depending on the day of the week and bank processing times.

I believe the practice of extracting funds from a customers BEFORE checking/despatching stock is extremely poor service. I've had it happen before, but only in very rare circumstances when the seller had a genuine excuse for a delayed delivery and instead offered me a refund. In this case, while Woolworths gets no obvious financial benefit, in some circumstances their procedure of automatic deduction clearly disadvantages a purchaser. For example, accounts which pay interest on the lowest balance will be affected (could be significant depending on the purchase amount), and customers have to wait to get access to their own (refunded) money. You could argue that both of these situations would have applied anyway had the full order gone through, but that is not the point. My issue is with the practice.

When I rang Woolworths all a customer service representative could advise is "that is the system". My response is - "in modern times it shouldn't be, and in any case it's poor customer service". Not happy Woolworths!

By the way I could have filled my order in the local supermarket - I saw they had 4 or 5 of the item on the shelf the next day, but I'd already placed my order online. Live and learn.

Comments

  • I try to avoid the problem by allowing substitution on my online supermarket orders, if they are out-of-stock you are often better off with the replacements.

    • Good advice, thanks. In this case the items were specific so probably not possible. I don't shop for standard supermarket fare online - no need. They didn't offer a raincheck either. I've given Woolworths my only response - told them to delete the account, and I've sent a complaint to the ACCC. Not expecting a change anytime soon but if enough consumers complain about such practices they will investigate. For the time being it's caveat emptor.

  • +1

    amazon is the best imho.

  • credit card refunds at coles/woolworths/bunnings/etc take a day, possibly two, for me. not a big deal really

    you only bought 3 items?

    • I assume the poster was after mobile phones or some other high value item.

    • Last time I needed to get a refund it Bunnings I was told it could take up to 7 (business) days, and it did. I can totally understand your annoyance, OP, because there's just no excuse for it.

  • "…while Woolworths gets no obvious financial benefit…"

    It wouldn't surprise me if their system actually does give them a financial benefit. Given the sheer volume of customers there would be a large number of refunds waiting to be processed on any given day. This would probably give them a sizeable sum of rotating cash in their coffers - that they are earning a return on or utilising in some manner.

  • I recently had this happen with a UK retailer. Worse, with exchange rates and fees I ended up out of pocket by $6 when the refund went through 6 days later. I was irritated too that payment was extracted - my thought is that this is a contract of some sort. Fortunately for me the retailer have given me a discount code to use on my next order which should see me recoup my loss, but the principle is the same. Surely there is a way for them to hold the funds (the same as hotels do) and then release the funds if the order isn't fulfilled.

  • There is, or was, I don't know anymore but greed being what it is … a financial benefit to having your money in their accounts overnight. Back in the day I knew of corporate accounts earning 7% overnight on high risk short term investments. Wouldn't surprise me if it was better (or worse) these days with the deregulation of banking practices. Big business having thousands of financial transactions a day I'm sure an accountant could devise a way of profiting from it. I just don't pay for what is not available unless I am willing to wait.

  • +1

    The retailers can avoid this by changing their process slightly.
    For some reason most just don't care….

    Current process… #1, debit the card, #2, allocate stock… OOOPS, insufficient stock…

    Easier… #1, Reserve stock, #2 Debit credit card.

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