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[Noam]

Along the same lines, though, are they even ALLOWED to charge your card before they ship the item? I know that just about every other vendor I deal with (at least I can't think of one who is different) waits to charge the card until the product ships (or at least until it is boxed up with a shipping label, waiting for the shipper to pick it up).

There has to be some reason why they (nearly) all do it this way.

[HA Dave]

..... are they even ALLOWED to charge your card before they ship the item? There has to be some reason why they (nearly) all do it this way.

Yes vendors can accept cash, a check, or charge a credit card at the time a purchase is made. I think the trend of charging at the time of shipping is a show of good faith that predates the fast delivery times we have today. There is no requirement in my state that would cause any vendor to wait till a certain point in the sales process to receive money(s).

It would appear that the connection between sales, shipping, and customer service is somewhat disrupted. I don't know how new that is to X10. All this could be a new software package, staffing changes, or whatever. I would just guess... that X10 can't keep track of how little inventory they now have.

Certainly with today's bank deposit interest rates... there is no benefit for X10 to hold a few thousand dollars. The administration of such a fund would cost considerably more than any income it could generate.

[beelocks]

Along the same lines, though, are they even ALLOWED to charge your card before they ship the item?

If you (using the figurative you) sell something on eBay, eBay actually recommends that you don't ship until you see payment.
If you accept payment by Paypal, you cannot even use the Paypal shipping tool until the payment is cleared - this commonly happens when the buyer pays by eCheck via Paypal.

Mail-order sales always have been, and always will be, a matter of trust. The vendor wants to be sure of payment BEFORE the goods leave his hands. The buyer wants the goods in his hands BEFORE he parts with the money. Since one of these things must happen first when there is the delay necessary by shipping, someone will always complain.

It's unfortunate that X10 has a poor refund policy. It's unfortunate that X10 'sells' stuff that they cannot deliver.

I would imagine that the hours they spend in processing payments and refunds by far outweighs any interest earned in holding that money for 30 days. $600 at, let's say 0.5% for a month would yield about 25c - manpower to process a credit card and resultant refund probably takes somewhere around 20 minutes - at minimum wage they'd be paying about $2.50 to gain a quarter.

Isn't there something about being as happy as a man who found a penny and lost a dollar?

[HA Dave]

If you (using the figurative you) sell something on eBay, eBay actually recommends that you don't ship until you see payment.
If you accept payment by Paypal, you cannot even use the Paypal shipping tool until the payment is cleared - this commonly happens when the buyer pays by eCheck via Paypal......
.... I would imagine that the hours they spend in processing payments and refunds by far outweighs any interest earned in holding that money for 30 days. $600 at, let's say 0.5% for a month would yield about 25c - manpower to process a credit card and resultant refund probably takes somewhere around 20 minutes - at minimum wage they'd be paying about $2.50 to gain a quarter.

Thank you. I think your explanation was clearer than mine. X10 may be having some issues... but their practices and intentions seem normal enough. I certainly DON"T think they're doing anything crooked... as some have implied.

But I also worked in banking and Noam has a great point as well. It only takes a phone call to stop (or delay) payment on a charge that a user thinks is iffy. It's not that I don't sympathise with the users... I do. But I also feel they might be overreacting a tad.

[Brian H]

Any GOOD stock control system would know when an item was out of stock before processing the order.

[beelocks]

Any GOOD stock control system would know when an item was out of stock before processing the order.

Any GOOD web order processing system would be connected to the stock control system and cease order processing on a particular item when stocks become low.
When it comes to the X10 website, I don't think good is a word that should be used too loosely

[HA Dave]

For whatever the reason(s)... stock control is apparently not working at the order processing level.

The way any network is administrated.... is based on permissions and group membership. From the stories I've read, it would NOT appear that sales (group) has [direct] permissions to view stock levels. But it does seem to appear that once an order has been placed (and processed) the status and/or availability of the merchandise is known.... at least at the customer service (group) level. It could be as simple as including salespeople in stock/inventory control group. At least... with limited permissions in that group.

Then, it would only be a matter of using a software that would allow for a seemless way to check availability. Or a motivation for salespeople to check stock availability at the time an order is placed.

Of course... in any modern software system... all that would be automatic and a saleperson would not be able to process orders without knowing if some merchandise was out of stock. So ether the processing software is poorly administrated... or salespeople are more motivated to complete/close/process sales than be upfront about stock problems. Guess where I'd bet the problem is.

[Noam]

Along the same lines, though, are they even ALLOWED to charge your card before they ship the item?

I realized after I posted this, that my question doesn't make any sense. The examples given with eBay and PayPal prove that point.
OF COURSE they can accept payment before shipping the item. However, doing so - especially for an item that they know isn't available - is not a very nice thing to do (and may border on some ethical gray areas, too).

As for their inventory management, I have a strong feeling that this is a case of "the right hand doesn't know what the left hand is doing."
Their website should indicate when an item is out of stock, and warn the customer that it is not available, and/or is on back-order, with an estimated arrival date. That would be much more helpful to the customer, and would probably help swing the average customer experience for the better.
To go one further, perhaps instead of charging when the order is placed (as they do now), charge only AFTER confirming the item is in stock and available to ship. For orders that are in stock, not much would change (they get the money, they ship the item, etc). For items that are not in stock, it would reduce customer dissatisfaction, as well as the amount of work needed to process refunds for cancelled orders.
They can certainly put a hold on the credit card for the amount of the purchase, at the time of the purchase. However, it seems a lot easier to cancel a hold, than it is to reverse a transaction, at least for them.

[luke03]

I think when people ordering online, the merchant normally authorize the amount, but without actually charge the card.  However, credit card company will take that amount away from your available credit line.  Within few days, if merchant did not "finalize" the charge, the credit will be automatically released by the credit card company.

Merchant never had that money in its account during this process.  They only got money when they finalize the charge process.  I think he placed a phone order, and the order taking person took down the email address wrong, then the item was not in stock, those all unfortunate things.   X10 does need to have better training for their order desk people.  But I don't think X10 has any bad intention.

I normally rather to place an order online than talk to sales desk people -- a lot of them work on minmum wage with minimum training, the chance of writing down email address wrong is almost certain.  Even when I placed order with Canon parts department, they constantly got email address wrong.  That is unfortunate normal for them.

[Brian H]

Yes. My orders placed on line normally put a reserved hold on the amount of the order to my credit card.

I had a vendors computer one time hiccup and reserved twenty four backup generators to my credit card. Virtually locking the card out with no more funds available.