If you travel as much as I do and use your credit card for every purchase from apples to zebras, you know it's rare to recognize the name of a merchant listed on your credit card statement. For example, you may go to a restaurant by the name of Dave's Bar and Grill and get a charge on your card a day later from Smith Enterprises--and you know you didn't buy anything from a Mr. Smith.
So the way this works is, the bar was set up by Dave Smith's parent company, Smith Enterprises, which owns a bunch of restaurants. When establishing merchant status, which is the ability to accept Visa, MasterCard and American Express, Dave filled out the parent company's name, Smith Enterprises, in the merchant status application because the bar and grill is only a DBA ("doing business as"). This, of course, causes lots of problems.
The New York Times reports, "Every time someone initiates a dispute, the bank that issued the card must look into it. Someone has to contact the merchant and wait for a reply that may include a receipt or other documentation.
"Merchants must carve out time to respond to each dispute. They also pay one-time fees for the privilege and may end up paying higher overall fees to accept cards if disputes are too frequent. Or they just get cut off from accepting cards altogether.
"The true cost per dispute to the banks of all of this back and forth ranges from $10 to $40, according to a 2010 estimate by the consultants at First Annapolis."
And you say, "Anyway,how is that my problem?" Because you still have a confusing statement and don't know if your card was fraudulently charged or the merchant is making you work hard to determine what you bought. This costs you time and energy.There are generally three things you can do to figure this out:
- Google the name of the company that charged you. Chances are, many others have the same issue and the answer to your question is right there.
- Call your credit card company and see if it has any inside info. If not, you may need to start a dispute.
- Sign up for BillGuard. It's free and has a system that allows you to see what banks and credit card companies might not. You can search the name of any mystery merchants here to find out who the heck they are.