Small businesses rely on credit card purchases for revenue, but one Calgary business is being hit hard following an alleged fraud and claims to receive little support from its service providers.
“Everyone seems to ignore us,” says Lindsey Heintz, co-owner of Wicked Alternative Body Fashion. “No one ever answered me. We are leaving in a few weeks now.
On Dec. 4, just before 11 a.m., Heintz says a man arrived at the company’s Chinook Center to purchase a small item with a Mastercard. However, Heintz said, when the man was given a portable debit terminal to pay, he was able to get $4,800 refunded. Then the man hurried away.
Wicked Alternative Body Fashion uses a Moneris machine to accept credit card payments and Heintz says the company initially came to his defense after the theft.
“We immediately called Moneris, our debit terminal and provider, told them the story and they put everything on hold. The next day our money was refunded and we thought that was the end of the story.
However, according to Heintz, this was only the beginning.
“This individual disputed it with Mastercard. So when this happens, Mastercard requires certain documents that we have to provide to them to prove that this is a legitimate transaction or that there was an error. We did it through Moneris…. We downloaded all the documentation we had,” Heintz said.
He claims Mastercard then rejected his initial request and returned the money to the alleged fraudster.
“We’re right between a rock and a hard place. We just don’t know what to do.
He says his company is not a megacorporation that can afford to let a loss of this magnitude slide.
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“We are a small family business. Currently we have around 16 employees spread across three locations.
Heintz says it can’t be an error on his employee’s part because he’s not trained to issue refunds.
“We do not issue refunds because with our product it is a Health Canada issue because it is body jewelry. There are no refunds, no returns.
Plus, he says this should be an easy situation to prove since no transactions of nearly $5,000 have been made at the store in the past.
“He never made a $4,800 purchase with us. Most of our items cost between $30 and $60. We have a few items that cost $300 and we might sell one a year. For that amount to be taken away from us and people saying there’s not enough evidence, well, there’s enough evidence,” Heintz said.
Arthur Schafer, professor and founding director of the Center for Professional and Applied Ethics at the University of Manitoba, says this case demonstrates a lack of support for small businesses.
“It is expected that (banks and credit card issuers) will have security systems in place to protect individuals and small business owners from fraudsters, from exploitation and from criminals,” Schafer said.
“In this case, none of the red flags were reported…. Today, they seem to be dragging their feet when it comes to making amends to the defrauded business owner.
He says red flags should have been raised at the time the transaction took place and the bank should never have released the funds to the alleged fraudster before everything was resolved.
“The story just doesn’t make sense…. It was an atypical transaction, it was not the right amount given this activity,” Schafer said.
He says such situations can lead to a complete breakdown of trust between banks and customers.
“It’s really confusing. I think this will undermine people’s confidence in the integrity of the systems in place at BMO, Mastercard and Moneris. I think the company should immediately investigate what went wrong on their end, because they are clearly at fault.”
For Heintz and his family, the loss goes beyond the financial issue, creating emotional upheaval at the end of an already difficult year.
“It has devastated me, my wife and my daughter, who is also a partner. This has affected our staff – we are small. We’ve had a tough year, like everyone else in retail. Last year was really, really tough with the economy,” Heintz said.
“We actually fell apart a little bit because of it. We’re trying to do everything we can to get that money back. We need this money back. It is rightfully ours and it has been stolen from us. You too feel violated. It was a punch in the gut, a really hard punch in the gut.
For Schafer, knowing that banks support their customers is essential to maintaining future trust.
“When something goes wrong, they have the capacity to absorb the loss far more than any individual or business owner, so I would like to know what their policy is; I think the public would like to know that.
Moneris says it always advises retailers to be careful during transactions and use administrator passwords to unlock an action such as a refund.
Heintz says his employee was trying to ensure users’ privacy as they typically entered their PIN.
Mastercard says it will work with the merchant’s bank and the consumer’s issuing bank to understand the situation.
“In such cases, chargebacks are handled directly between these banks,” a spokesperson said in a brief statement on Thursday.
Even as he and his family continue to absorb the financial hit, Heintz says he still hopes things work out in the end.
“At first I was optimistic, but now I don’t even know what to think about all this.”
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