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Whats the real deal with Chargeback - please help

Discussion in 'DIRECTV General Discussion' started by sattechnology, Feb 24, 2004.

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  1. I am a Directv and Dishnetwork dealer who is very concerned about chargebacks. Can someone clarify what the rules are about going after customers for chargebacks and the best way to go about it????
    I understand dishnetwork says you can go after the customer however directv says you cannot have a 3rd party agreement????


    Any suggestions appreciated. this is getting very expensive.
     
  2. JulienPDX

    JulienPDX Legend

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    Feb 2, 2004
    what the heck is a chargeback?
     
  3. Jacob S

    Jacob S Hall Of Fame

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    When a retailer sells someone a satellite system he/she receivers commissions for that sale. When that customer shuts his/her system off before one year the retailer will have to pay back the commissions in part or in whole. The longer the customer keeps the system during the chargeback period the more of that commission the retailer gets to keep, the less he has to pay back.

    It is a business that has risks just like any other business and if you cannot afford the risk then one needs to go out of business. If you want to be in business you have to take the chance. Even with your own contract it will not always do you good as you would have to sue in some cases and you cannot get blood out of a turnip.
     
  4. JulienPDX

    JulienPDX Legend

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    Feb 2, 2004
    that is dumb, i think the installers shouldn't have to bear the responsibilty of cancelled subs. Most people dont cancel out of their contract unless they are unhappy with the service for whatever reason.

    i'm a little upset that I purchased my own directv equipment and installed it myself, yet i STILL was required to agree to a year long contract ..even though I'm not getting anything out of it.

    It would seem to me that its only fair to put a customer in a contract if you are giving them some sort of free good or service up front. What has DirecTV given me that requires them to put a contract on my head?
     
  5. boba

    boba Hall Of Fame

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    Julien they gave you about $150 off each receiver that you purchased. DISH and Directv call it customer aquisition cost it runs about $350 to 500 per customer.
     
  6. digital223

    digital223 Legend

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    Dec 18, 2002
    I just thought i'd toss my 2 cents in here.
    just over a year ago i bought a 508 @ $69.00 which required a 1 year commitment, with a dealer in the midwest via the internet and tel conversations.
    I not only got a super deal on a the 508 and 2 r/c [2nd r/c cost$49.00]. I also did the installation and received $100.00 for doing it. They supplied a quality install kit packed in w/the receiver and dish 500. Total cost to me was $18.00.

    Aren't there any deals like this around anymore ? E*or D*?
     
  7. Mark Holtz

    Mark Holtz Day Sleeper DBSTalk Club

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    So, how does the installer know that the customer is probably a deadbeat and doesn't pay? The customer purchased the equipment through a online retailer, and has it in his hot little hands. The installer installs the equipment. Then, the call is made to turn on the subscription. With a CC, the customer is activated.
     
  8. Strong

    Strong Icon/Supporter DBSTalk Gold Club

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    I'm very sceptical of that argument.

    He said he purchased his equipment. I assume he meant that he purchsed it full price from a retailer (e.g. Best Buy, etc). If what you are saying is correct, then D* is selling the equipment to the retailer for $150 below what it costs for D* to purchase it from ithe manufacturer??

    To me, the one year contract should only apply to folks that get free equipment and/or free installations. Why should someone that didn't take advantage of free equipment or service owe D* anything if they don't stay for a full year.
     
  9. Jacob S

    Jacob S Hall Of Fame

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    The internet dealers were able to sell for so cheap because they would do them in bulk, did not have to install the system, and had a credit card to charge if the customer did not keep the system active for a year. There's probably not as many internet retailers or deals you can get on the internet because of newer rules implemented to penalize retailers for higher churn. They do this by charging a LOT more for receivers (ending up being as much as twice as much) when they are already paying retail plus shipping. Also the low hanging fruit is gone for the most part.

    They want to lay the risk down upon the retailers instead of themselves and lower their acquisition costs. It can still make good money if a retailer watches who they sell to and turn down some customers that would be higher risk.
     
  10. Mainstreet

    Mainstreet Legend

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    Jun 28, 2002
    We do our own Equifax credit checks (full reports) on all of our satellite customers to try to screen out deadbeats. Sometimes that is still not enough, and we get a chargeback anyway. We have learned that we definitely cannot trust DISH Network's credit scoring criteria. They have been approving customers with massive amounts of collection items - even cable co's and DirecTV - and with bankruptcies, and scores in the low 500's. Right before they announced this new "No commitment" DHA promotion, they told us that they had just lowered the credit criteria again. They said it like it was a good thing. :nono2:

    As a retailer we are charged back, but I do not charge the money paid to my installers back. The only time the installer gets charged back in my company is if I am the installer. :(
     
  11. Mark Holtz

    Mark Holtz Day Sleeper DBSTalk Club

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    What prevents the customer from ordering over the Internet using a temporary VISA/Mastercard number that some credit companies offer nowadays like MBNA?
     
  12. JulienPDX

    JulienPDX Legend

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    Feb 2, 2004

    Thank you! I fired off an email to them thru their website to bring this to their attention, because I just activated on the 6th of February so I'm still within my first 30 days. It basically said that I paid full price for my recievers and an 18" dish and didn't get a rebate or take a free installation, so why am I still required to be under a contract? I gave them the option of either releasing me from contract or sending me a tivo and elliptical dish and keeping me under contract. After all, with what I paid at the store, I could have spent half thru expert satellite .com and gotten a tivo out of the deal AND an 18-inch dish.

    We'll see what they say.
     
  13. Strong

    Strong Icon/Supporter DBSTalk Gold Club

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    Julien, you are more of an optimist than I am. I'd be shocked if you receive anything more than a form e-mail telling you that is their "policy". Maybe as a sop they will offer you 6 months of discounted HBO which is about as much as I've seen them give someone with a complaint.

    You may be the lucky one, but the chances of reaching someone with decision making authority (e.g. a VP of Customer Relations type) or the ability to rationally explain this policy is virtually nil.

    I can understand why cell phone companies want you under contract if you get a free phone, but they also make you sign a contract to activate your service even if you but a phone outright. Again, I have no idea why they started such a policy, but I guess they do it because its to their advantage and because they can!
     
  14. Mainstreet

    Mainstreet Legend

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    DirecTV started doing the one-year agreements to help combat piracy. There were too many systems being sold by the chain stores that were never getting activated with a subscription. People could just walk out the door and pirate the card to get whatever they wanted without ever signing up. Now the pirates have to be a little more clever with used equipment instead.

    DirecTV's policy is that if a new access card goes out the door, it will be tied to a new annual agreement. If you add a receiver on to your account and pay $150 (why would you?) for it you still must agree to another year of service to activate it.

    The wholesale price of DirecTV's receivers are around $150 for basic receivers, and about $400 for Tivo based receiver. The retailer gets a "prepaid commission" in the form of a buydown, so they don't end up paying the distributor that much. But before the prepaid commission, the receivers cost about $150. That is another reason why you need an annual agreement.
     
  15. Strong

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    Interesting, but I'm still not sold.

    The basic receivers (e.g, Phillips DSX5500) can be bought in my local Best Buy for $79.99 retail. http://www.bestbuy.com/site/olspage.jsp?id=1051826213597&skuId=5434531&type=product I have no idea how much BB pays for them or if they get a commision up front. They will ask for a phone number and address, but when I get them for a customer I tell the clerk I'm homeless and don't have a phone. They look at me funny, I give them the cash and I walk out the door.

    D* also requires a new 1 year commitment when you change the service. I don't recall if they do this if you add new programing or only if you add new receivers though.

    Some people would rather pay the full retail price and not have to bother with a stranger coming into their home to install and activate the receiver.
     
  16. Mainstreet

    Mainstreet Legend

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    Jun 28, 2002

    Yes, they definitely get a prepaid commission to get it out the door at that price. I guarantee they are paying more than $79.99 for the receiver - before buydown. I sell the similar Hughes branded models for $49.99 all day long to existing customers. I pay about $130 for them - not counting the buydown PPC. I just effectively pass part of the commission on to the customer.

    Just because you get some minimum wage flunky to let you out the door without signing an agreement, doesn't mean that they are folowing the rules. The rules are - you don't sign the agreement, you don't get the receiver.

    Also, I don't understand what having a stranger coming into someones home has anything to do with having or not having an annual agreement. The installation has nothing to do with it. Even on cash and carry sales where the customer takes it out the door, the annual agreement is required. It's not like we can just call up DTV and ask them to take back our buydown commission just because a customer wants to pay full price for a receiver and not have an annual agreement.
     
  17. Strong

    Strong Icon/Supporter DBSTalk Gold Club

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    Ok..I'm trying to understand the math.

    Lets say BB buys the receivers for $160. They sell them for $80. They are now in the hole for $80.
    Also lets assume BB gets $200 (commision) from D* for each receiver they sell. Now BB is up $120. If the customer stays with D* for 12 months BB keeps the entire commision. If the customer cancels after 1 month, BB has to give back 11/12ths of that commision or $110 (which would put them back in the hole $70).

    Is my understanding correct?

    Also, the comment about the stranger coming into a customers home to do the installation was in reference to your comment about why someone would want to pay full retail price for a receiver. Some folks would rather do it themselves and pay full price vs. having someone they don't know crawling around their HT.
     
  18. JulienPDX

    JulienPDX Legend

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    Feb 2, 2004
    hey guys, I didn't mean to spark a war.

    My point is simply that I did not recieve any type of "incentive" to join up like most people do when they sign up for a service that requires a contract. Now, it could be argued that an incentive was offered to me but I did not take it. True, I did buy the receivers at Best Buy and they did tell me that "someone would call me" to schedule an installation. But 4 days went by and I never heard from anyone. So I installed the stuff myself. It is also true that the Best Buy employee took down my information and made me sign a receipt that said I would activate the receivers within 30 days. But it only said I would have to agree to a commitment if I took the free installation….I didn’t, so why should I be under contract?

    I am not speaking in commission terms or even in sales terms, because frankly, as a customer that doesn’t' really mean jack to me and shouldn't. I realize companies usually have many different promotions running, but most companies will usually advertise their BEST special universally and not complicate matters by giving only a select few merchants the ability to give an even better deal.

    Anyway, my argument is purely subjective. Since I paid 100 bucks for two receivers and only an 18 inch dish..then discovered two days later that I could have gotten a MUCH better deal had I gone someplace else (namely, paid 49 bucks and gotten a Tivo, plain receiver and elliptical dish) but AM SEEMINGLY NOT ALLOWED TO RETURN my equipment to best buy, revoke my subscription and then go "re-sign up" somewhere else...shouldn't I be able to get a bit more out of them for having found this out?

    It's a question of customer service; that’s all. Having worked as a customer service manager for over 6 years, I think that I'm not out of bounds by requesting that someone at DirecTV look at this.
     
  19. Mainstreet

    Mainstreet Legend

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    Jun 28, 2002
    So, you didn't pay full price after all. You got a discounted price of $100, subsidized by DirecTV. That is what you are agreeing to the one year for. If you can, please post the exact wording of the agreement you signed at BB. I bet the annual agreement was not because of the free installation.

    Like I said, you would have had to sign a 1 yr agreement even if the install wasn't offered. The DTV agreement for any access card activation.
     
  20. JulienPDX

    JulienPDX Legend

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    Feb 2, 2004
    this was the price that was given to me at bestbuy, how am I to know if it is a "discounted" price? Especially when I see stand-alone recievers for existing subs at 49.99?

    C'mon guys, this technology is cheap to mass produce and this type of device has been out long enough and sold to so many people that 100 bucks for two receivers is about spot-on, its not some huge discount. It sounds to me like DIRECTV is just like any other service provider nowadays..they want a contract and they seemingly don't feel the need to offer anything in return for that. I can see how cable might have the upper hand in this type of situation.
     
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