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Commission based pay, Florida -- sale fell through, chargeback issues

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  • Commission based pay, Florida -- sale fell through, chargeback issues

    I am an employee in a Florida company, selling mostly over a telephone. I have been told that my check is being reduced because of a chargeback that came from a customer. The company that I work for has a STRICT "no-return" policy. Dealers sign this agreement before purchasing.

    The commission was already paid to me, the week after the sale. Almost a month after the sale was originally processed, the customer reversed the order.

    I was verbally told before this happened that "if the customer ever reversed the order with the credit card company, 'we' will always win because of the signed agreement by the dealer".

    It is my belief that the company should take on the fiscal risk of this sale reversing when they verbally assure that sales cannot be reversed, referencing a written agreement with their dealer of the no returns policy.

    What leg, if any, do I have to stand upon? Thank you for your time and consideration, it is a big help to me.

  • #2
    You can check with a local attorney versed in employment law or call the federal DOL, but unless the commission plan is an enforceable contract which includes the provision you cite, and doesn't include a provision for reducing future commissions by chargebacks, I don't hold out a lot of hope.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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    • #3
      Thanks for your quick reply. This site is most definitely an asset and, especially as I move into operating my own businesses, I will have to stay active on here. Commissions are not a friendly subject with regards to the labor laws as I have seen them... Oh well, live and learn! I will continue to try good, old-fashioned optimism and see if I can't help resolve this faster through any other means (i.e. making sure I'm leaving this company on a good note).

      Thanks again for the reply.

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      • #4
        As you can see, if/when you go forward with your own business and design compensation packages, the need is obvious to be VERY clear and detailed in the commission plan. ScottB may have more advice on this, as he has his own business and, I believe, has some commissioned employees.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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        • #5
          Originally posted by racer_x View Post
          Commissions are not a friendly subject with regards to the labor laws as I have seen them...
          You may sing another tune when you have commissioned employees. You can duck the issue entirely but not paying commissions.

          I have no problem with chargebacks, despite any propaganda the company may spout about no refunds. It is good for business that they do refund, certainly if there were problems with the sale or delivery.

          The commissioned employee should be involved with the problem, though, since there his/her money is at stake. If all efforts fails and a refund is due, no commission (or a commission chargeback, if appropriate).

          I also believe that commissioned employees do not earn the commission until the customer pays. That avoids most of the problems with chargebacks.

          Then there are guarantees. Say a recruiting firm offers to refund the placement fee in full if the placed applicant does not last six months. The hiring company pays in 30 days. The hire quits on Day 170 and the recruiting firm refunds the entire amount, as agreed. The chargeback to the recruiter could be significant (figure 40% of a placement fee of 30% of an annual salary of, oh, $80,000 = $9600). Tough for the recruiter to absorb that kind of chargeback, but no easier for the company.
          Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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          • #6
            I'm an insurance agent. Chargebacks are a part of life.
            Please no private messages about your situation.

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