questionsif a vendor forgets to charge you for a purchase…

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Have you brought this to the company's attention?

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When did the item arrive? More than a day or two ago? Most reputable merchants will not debit your card until they actually ship a custom or back-ordered item, so if the arrival was very recent you may see a charge in the next day or two.

Since you undoubtedly want to be as good a customer as they have been a vendor for you, if you haven't seen a charge within a week of delivery you should give the company a call and ask them to check your account for any kind of problem.

Digging back into memory as a credit-union employee, I don't recall ever running into this question before. If you contact the merchant and still don't see a debit show up, it's probably best to call whoever issued/backs your credit card and ask for their guidelines.

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I've only run into it in a business context. We include a final billing date in our contracts, and state that we won't be liable for any unbilled expenses after that date. I'd imagine there's not a limit unless it's expressly stated.

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@magic cave: I've had the item at my home for about a week now. I ordered it on my check card (yeah, yeah, I know the risks and I accept them) and check my checking account at least once a day; no sign of a transaction from the vendor on this yet.

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@nmchapma: I was thinking of doing that sometime soon just so I don't get a really late surprise on the matter later on.

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@moondrake: That's pretty much what I'd think, also. It's a debt owed, and without written agreement to the contrary it continues to be owed till it's paid. However, I suppose it's possible that there's some unknown-to-us time frame to keep credit card holders from financial jeopardy months or years down the road.

CU experience: I once had an upset member call about a 28-month-old check that the payee had just submitted for deposit and cashed by a teller.
It was over $3k, and it nearly emptied the member's account. I don't recall the history of the delay in presentation, but checks are "stale" after six months, and following UCC guidelines my CU's policy is not to honor them. The teller had made an error, the money was immediately placed into the member's account, and the branch ate the loss.

EDIT: I used "credit card" in the first paragraph; debit/check cards work differently and have somewhat different rules.

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@moondrake: [nodding] The UCC guidelines are nicely flexible. Our policy was pretty simple; we didn't honor checks past six months of issue. The holder's recourse was to contact the maker of the check and ask for a replacement. If a check seems to be lost in the mail, should the maker just ignore it or do a stop payment? The article you linked to gives great info on that, and it's what I used to tell members who asked me.

On the flip side of that issue, I occasionally had to explain that yes, a person can legally hold your check for three weeks and then cash it. ("But I figured they'd just lost it, and I already spent that money!") That was a thought process I just couldn't grok intellectually.

Unfortunately, most of these situations happen so infrequently to any given person that there's no real reason they should know how it works till it happens to them.

It was interesting work.

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@magic cave: I have art shows that require payment six months in advance, then don;t cash the check till after the event. So I often have checks floating through my tracking system for 7 months. It's very annoying, especially since I pay all my other bills electronically and they are effectively immediate withdrawals. It's a pain to have to remember to bring forward all the floating checks every month on my excel budget tracking spreadsheet. I just sent a check for a Christmas show at a local church, and they aren't going to cash it till after Christmas, probably after New Years. So I am going to have to remember I have that $95 out till next year.

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@moondrake: Well, dang, that's a serious PIA!! Seems to me they might just as well cash the check as not, since I suppose it's just to reserve a space? Probably too much trouble for them, especially if they have any kind of high no-show rate.

Is it worth opening a separate account for just those checks? Maybe depositing money to cover them at the time you write them, back the amount out of the balance, and then all you need to do at the appropriate time is check to make sure the check has been deposited?

I do that with my vacation/travel savings, but it has nowhere the kind of activity that your account does.

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@magic cave: Having worked in the credit card industry for over a decade, I have encountered the situation where the merchant does not process a transaction for a long time. It usually happens for international transactions.

Travel overseas and buy a widget for 5928 rupees which is equivalent to $100. They wait until the rupee value increases compared to the dollar. They still get 5928 rupees but their buying power is better. The conversion from rupees to dollars occur when the transaction goes through the merchant bank -- not the transaction date -- so it's possible to be billed $125 for something you thought would cost you $100.

Once a transaction is approved, the merchant receives an authorization. That authorization stays on the account (at the bank I worked for) for 10 days. This sets aside the funds to cover that transaction when it's presented for payment. They can still submit it after the 10 days but they are not guaranteed that the funds are available.

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@magic cave: I have often thought I should open a second account just for my little hobby business. It would be a better way to keep track of funds, as there is a lot of slush between personal funds and :business" funds now. I report it on my income tax as hobby income. A knowledgeable friend thinks I should incorporate it as a non-profit and teach some community classes on art, promote art, sell the art, and pay myself a modest "salary". I need to examine of that's a reasonable approach. I may get the hobby its own bank account in January just for tracking purposes, and dedicate the credit card I use for Paypal just to that account.

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@moondrake: If you're planning on doing that to avoid taxes, it will not work. Your business may not pay taxes as a non-profit entity but you will still pay taxes on the salary that you give yourself. You may find that it is a lot of extra paperwork to establish a non-profit and may not be worth all that trouble unless you're planning on receiving donations and grants.

For one example, if you were a LLC, the profits of your company get added to your other personal income and reported to the IRS. You may need to estimate taxes and pay the IRS throughout the year instead of just on April 15 like you normally do. If you incorporated into a non-profit, you will then need to pay yourself as an employee and withhold taxes like any regular employer would on each paycheck. Getting the payroll part right is difficult and there are companies that specialize in doing that paperwork (another expense for you).

In any event, good luck with your business venture. I wish you the best.

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@cengland0: The payroll taxes part is a good point I hadn't thought about. I knew I'd still need to pay income taxes. But right now I am paying income taxes on my gross sales. As far as I know I have to report all my hobby income without deducting the costs associated with it. If I was selling as the non-profit and paying myself a salary with the net proceeds, I'd only be paying taxes on the net sales rather than the gross sales. I also wouldn't have to pay sales tax for the materials I buy locally. I suppose what I really need to do is break down and get some advice from an accountant. It's just an expense I have been trying to avoid. It seems like the government is dead-set on quashing entrepreneurism. I wish they'd set a minimum limit below which cottage industries could chug along without having to open a vein at the end of every year.

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@moondrake: I would strongly recommend you talk to an accountant. You should not have to pay taxes on gross income no matter what kind of company you are. It is based on net after all expenses are deducted. You must keep accurate account of all your expenses. You can even deduct miles if you travel to art shows for your business.

I'm involved in many business ventures and have an EA (Enrolled Agent) do my taxes. None of them are non-profit and I have always been able to deduct expenses and pay tax only on the difference. There are some exceptions. One business loses money every year so I cannot take a loss any more. It is classified by the IRS as a hobby. Another business is real estate and I cannot deduct the mortgage payments that I make. The house gets depreciated instead. Any of the other income made by the businesses are simply added to my own personal income that I earn while working for another large corporation.

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@cengland0: Thanks. I am not incorporated as a business and have just been reporting the income as hobby income on my taxes. I guess I need to so some research on that.

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@cengland0: I was hoping you had some additional information. I learned all sorts of new stuff today -- many thanks!

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@cengland0: Thanks for your informative and helpful responses to this. This is the kind of thing that makes me remember why it's so hard to leave. The communal knowledge base here is incredible.

Your brief explanation about exchange rates gave me new insight into why (while I worked) foreign travel to certain countries would necessitate either traveler's checks or a credit card in the currency of the country being visited. Completely fascinating, and thanks very much.

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I hadn't got around to contacting the vendor / manufacturer on this yet (calling them was on my "to do" list for some time) but I just noticed today that the charge is now pending. I looked back through some other history I have and found that I ordered them on May 22.