Chip said:
There is no differentiation on the merchant side between different types of cards. As far as Craig or his bank can tell, they are all credit cards.
Apart from the fact that the BIN identifies it as a debit card, and that debit cards attract a fixed fee rather than a percentage of the transaction...
If you don't like speculation, skip the rest of this.
I've been thinking about this, and am now slightly concerned about the funding of Pandora. Here's my supposition, making the assumption that pre-ordering was to fund the manufacturing process because it couldn't be funded in other ways:
- Money has come in from the preorders paid on credit/debit cards
- Parts have been ordered on the basis money is in
- Bank is saying that they will not release money from cards because of high risk of chargebacks
- manufacturers needs paying or demand payment up front due to unknown credit rating of Pandora/...
- specs change. Now risk of chargeback is large as people may receive goods "signficantly different" from as advertised and therefore will drop immediately on the merchant's head. Bank could end up carrying can - see below.
- Bank will not release funds
- refunds are being sent from the "held" pool of money because bank will not release funds.
- manufacturer still needs paying...
I can't blame the bank for being awkward whatsoever.
Worst case scenario is that Pandora can't deliver the product it promised, people claim the money back off their credit card issuer, credit card issuer claims money back from merchant acquirer (Craig's bank). Bank tries to get money back off Craig, to find that it's all gone paying manufacturer.
Bank is left exposed to the tune of £800,000 (4000x200) only secured on incomplete pandoras or parts from manufacturers. This assumes no funds are available from the devs or other businesses they are involved in, which might be utterly wrong!
In the current scenario of the world's state of financial institutions, do you think they're going to take a punt on a relatively unknown player, or do you think they're going to dig their heels in a bit?
FWIW, I don't have a mail yet and despite trusting the devs I wouldn't send a bank transfer. Once the refund is in, I'll happily pay again... With credit card.
Great post. Now, if Chip/Craig can be open about the situation I'll happily reorder with a credit card. If another variant of "Everything's fine" is produced, I'll keep my money.