Can a Merchant Charge Your Card Before Merchandise Ships?

[cv91915]

I have a small handful of items (a small table, counter stools) that I ordered knowing that delivery would take a matter of a few to several weeks.

 

I was under the impression that somewhere along the line (perhaps at the payment network level) by policy the merchant isn't allowed to charge your credit card until the merchandise ships.  Did I make this up?  

 

The charges have all posted to the respective cards, and the item with the longest delivery time isn't expected to arrive until sometime in September.  

 

This is more of a curiosity question.  There isn't a ton of money involved, and I trust both merchants to deliver the merchandise.

[StarkRaven$]

Good question and I've wondered the same. As the same thing happened to me last year. My newly acquired Amex card was charged immediately for an item, yet the item didn't ship for months. It was for a trival amount of $ but it irritated me just the same. The tracking online was useless as it just stayed in a "awaiting to be received by [foreign mail carrier] service" mode.  I didn't want to dispute charges with Amex since I was brand new with them. Just thought it may leave a bad taste with them. So a couple of months later, long after I forgot about the order, it arrived.

 

The FTC gives this information: "The Fair Credit Billing Act and the Mail or Telephone Order Merchandise Rule protect you so you don’t have to pay for merchandise you order but never receive. According to the Federal Trade Commission, however, many credit card issuers do not allow merchants to charge your credit card before they ship."

[cv91915]

4 hours ago, StarkRaven$ said:

Good question and I've wondered the same. As the same thing happened to me last year. My newly acquired Amex card was charged immediately for an item, yet the item didn't ship for months. It was for a trival amount of $ but it irritated me just the same. The tracking online was useless as it just stayed in a "awaiting to be received by [foreign mail carrier] service" mode.  I didn't want to dispute charges with Amex since I was brand new with them. Just thought it may leave a bad taste with them. So a couple of months later, long after I forgot about the order, it arrived.

 

The FTC gives this information: "The Fair Credit Billing Act and the Mail or Telephone Order Merchandise Rule protect you so you don’t have to pay for merchandise you order but never receive. According to the Federal Trade Commission, however, many credit card issuers do not allow merchants to charge your credit card before they ship."

 

Thanks.  I ran across a similar citation.  Following those breadcrumbs, I ran into this in case it's of any interest.

 

https://www.consumer.ftc.gov/articles/what-do-if-youre-billed-things-you-never-got-or-you-get-unordered-products

 

I'm under the (perhaps mistaken) impression that one or more of the payment networks have more restrictive rules for merchants than the floor that's set by the FTC, but I haven't yet found anything to corroborate that.

 

I did find one reference that suggested that some issuers may have more restrictive requirements, but it would be impractical for a merchant to know the policies of every credit card issuer, much less have an organized system to monitor compliance. 

 

And further, it doesn't seem feasible for, say, a credit union in Alabama to have any meaningful recourse against a merchant in South Dakota for shipping something late.

[hdporter]

FWIW ...

Can mail-order merchants charge my card before they ship?

According to Janet Hug of Visa USA, "a merchant is not permitted to bill ahead of time" except in case of a deposit or down payment that the customer agrees to.

 

MasterCard said in a letter that a merchant can charge you before shipment only if s/he tells you and you agree to "the terms and conditions of the sale."

 

American Express said the merchant can charge your card as soon as you give your account number; but if you receive the bill before the merchandise, call Amex customer service and you don't have to pay while they investigate.

 

https://www.creditinfocenter.com/cards/crcd-buy.shtml

[jonson]

It would make sense not charging before shipping the merchandise, because if you have an issue with the product, you will be out of the time frame to dispute the charge.

[CTSoxFan]

On 7/15/2021 at 5:43 AM, jonson said:

It would make sense not charging before shipping the merchandise, because if you have an issue with the product, you will be out of the time frame to dispute the charge.

 

From Visa's internal document (found via Google), it says that you have 120 days from the latest date you expected to receive the goods or services to file a claim, no later than 540 days from the initial transaction date.  So unless it stretches out over a year and a half, you are covered in a pre-order situation.  I don't know if banks can have their own policies.

 

I have been charged up front previously for pre-ordered items, especially those in high demand.  They want to make sure they have secured the funds and have a paying customer, especially when there are other people who would buy the item.  Another case would be something custom made, where they want to be sure they get the funds prior to starting the work/securing materials, etc.

[CreditSucksNot]

I am a little late to the discussion but when I bought a new sofa and dining table back in March I was charged for the entire purchase.  The sofa was in stock and delivered a week later.  The dining table?  I was told to expect delivery around May 17th.  Then it got pushed to the 31st.  Ultimately after another delay it arrived on June 4th right before I was ready to simply cancel that purchase and get a refund due to the delays.  I don't know whether it is "legal" but it certainly is common to charge up front when it comes to furniture.