Salesforce, a Pillow Maker and a $125k AmEx Bill 228
itwbennett writes "Salesforce.com, pillow manufacturer My Pillow, and an employee of My Pillow are caught up in a complex three-way legal battle. At issue is an allegedly failed software implementation and a $125,000 charge on a personal card. In short, there was an aggressive go-live date, a demand for immediate payment, and a system that was ultimately 'not functional'. Now, AmEx won't remove the charge, Salesforce.com is suing My Pillow for breach of contract and wants $550,000 in damages, My Pillow denies it owes anyone anything and is seeking unspecified damages from Salesforce.com, and the employee with the big bill wants his account credited. Still unclear is why My Pillow had no choice but to use the employee's personal credit card — and why the employee was naive enough to hand it over."
Miles (Score:5, Informative)
I'm sure the employee wanted the miles.
Re:What? (Score:5, Informative)
it's a threeway bullshit throwing battle.
salesforce.com selling the work of some 3rd party consultant to the client for sum X and day Y, just shoveling bullshit for money. said consultant(or company or whatever, some entity) then delivered the thing late and held the project hostage until got payment roughly doubly the original estimate, said product wasn't "ready". the company buying the service actually paying that is the amazing part but not so amazing after you hear what the product was for: tracking effectiveness of every single 15-30sec tv advertisement, so their product request was bullshit as well.
but why would someone spot their company 125k of cash on a credit card? why is salesforce asking 550k for breach of contract when they didn't deliver? how come the pillow company is saying that their advertisement campaign failed because they lacked tracking? did their sales go up or not? how the fuck is salesforce getting away with saying to amex that a contract they have with my pillow allows them to charge a card they already refunded once and a card that's not my pillows card? why didn't he just cancel said card?
the only thing to take home from it is that you shouldn't do business with any of these companies. oh, and never ever loan your employer money.
Re:$125K 'personal' limit (Score:5, Informative)
People who aren't poor.
And old-school AmEx cards have no limit (in theory). And the balance on those old style accounts is due in full when the next statement is presented. Back in the day, it wasn't a credit card so much as a way for rich folks to pay for things while travelling without carrying a bunch of cash around or get businesses to accept personal checks. They'd pay the month's bill in full immediately, not carry a balance like poor people do with a regular credit card.
Summary (Score:5, Informative)
1. My pillow contracts sales force to give them a custom solution
2. Salesforce agrees & begins work that was due by June 1st
3. Work isn't done by June 1st and SF rep asks for 125k to do it by Aug. 1st that gets paid by employee card cause check "wouldn't work"
4. Aug 1st. SF does not deliver
5. My pillow refuses to pay SF, SF re-instates credit card charges to employee's card
6. SF sues My pillow for 550k stating substantial advertising efforts, employee disputes charge in court.
So this isn't a 3 way law-suit...
Before you go denouncing SF as being the anti-christ remember, we don't know what the requirements were, or how they were manipulated by either party. The employee's card being charged doesn't make my pillow look good either.
Personally, if I was that employee I'd maybe try to sue the sales rep for misrepresentation in the overall grey light of this case.
Re:$125K 'personal' limit (Score:3, Informative)
Not strictly true. The term used was (is) 'no pre set spending limit'. What this means in practical terms is that every charge authorization request goes through a complex decision tree based on many pieces of financial and fraud data before approving or denying the request. If your financial assets do not support your ability to pay for a charge, it won't go through. These products are charge cards, not credit cards. The 'no limit' misconception is fairly common though, just ask any of their call center employees.
Re:Why? Easy! (Score:5, Informative)
It does surprise me that AmEx wouldn't reverse the charge, though - They have one of the most consumer-friendly (and practically merchant-hostile) dispute policies out there. You ask, they reverse it and ask questions later, with the burden of proof on the merchant.
An article I once read about this case stated that that was exactly what happened:
Furlong subsequently disputed the $125,000 charge with American Express, and Salesforce.com credited back the amount
It wasn't until later that the questions were asked and proof provided by the merchant:
Furlong's card was subsequently re-charged for the $125,000 but this time American Express refused to credit his account, saying that Salesforce.com had provided "authorization for the charge and a signed contract and order form stating that no cancellations or refunds would be allowed,"
Re:What? (Score:5, Informative)
The summary was beyond awful. I actually had to read the article to figure this out:
My Pillow - A company that makes pillows
Salesforce.com - A company that makes software
Personal Credit Card - A My Pillow employee's credit card
My Pillow spent $60k-70k to have software delivered by June 1. It didn't make the date and Salesforce.com said they would have it done by Aug 1 for $125k. Salesforce.com didn't take checks so apparently credit card was the only/best option at the time.
Salesforce.com delivered a product on Aug 1. My Pillow says it wasn't done. That's the dispute. Salesforce.com still charged $125k, but they want $550k more for some reason??? One of the many things not addressed in the article is the contract between Salesforce.com and My Pillow on what Salesforce.com has to deliver. Why did My Pillow think it wasn't complete? If those requirements were outlined in the contract, then Salesforce.com is at fault. Who cares what AMEX will or will not refund. Salesforce.com would be in breach of contract...and I think that is case here, unless My Pillow is stupid and didn't put specifics in the contract.
Re:Come On Man (Score:4, Informative)
Because, "Furlong's card was subsequently re-charged for the $125,000 but this time American Express refused to credit his account, saying that Salesforce.com had provided "authorization for the charge and a signed contract and order form stating that no cancellations or refunds would be allowed," according to his suit."
Re:What? (Score:4, Informative)
For any corporate account small that GiganticCo, when you as an employee accept an Amex corporate card it has your name on it and you agree to be liable to Amex for all charges on the card, whether or not your employer pays through their direct-bill account. If the employee was direct to use his "corporate account" card as a p-card to pay for a major purchase, and his employer then failed to pay the invoice, well, he'd be in a heap-o-trouble.
sPh
Re:$125K 'personal' limit (Score:5, Informative)
Having has to suffer for a time working for a company that had something of a scam going regarding employees and AmEx cards (Litton Industries, absorbed by Northrop-Grumman in 2001) I have some insight into how the story might have unfolded.
Litton Industries had AmEx cards issued to employees. It had your name on them, you were required to activate and use them, you were solely responsible for paying the balances, but the limit was set by AmEx based on Litton Industries' financial situation and thus were effectively unlimited. You were required to pay all company travel expenses with them (even charging airline tickets to them) and file for re-embursement when the trip ended (or monthly is it was long-term). Thus the employee could be on the hook for quite substantial amounts of money at the direction and for the benefit of the company.
Something like this could have happened to the poor employee.
But back to Litton Industries. They could not process a reimbursement claim (which required multiple sign-offs) within a week, it often took two (or even more). And they had a "payment cycle" that cut a check only once a month, if approval came in by the cut-off date. So if you took a one-week trip, filed immediately upon return, it was almost impossible to get the check in hand before the monthly bill was due, and thus you either had to pay the balance off out of your own personal funds, or you were hit with a late fee that the company would not reimburse for.
I did not stick around there for long.
Re:What? (Score:5, Informative)
Yes, my bad. I do suck in this case.
Re:What? (Score:5, Informative)
The real story here is that American Express, unlike Visa and Mastercard, rarely -- if ever -- sides with a cardholder over a merchant, even in situations where it's blatantly obvious that a charge is wrong. It's how they're able to get merchants to accept higher swipe fees and transaction charges.
For the most part, if a cardholder files a chargeback with Mastercard or Visa that looks even slightly reasonable, they'll freeze the funds from the merchant account within a matter of minutes. They might not issue the refund to the cardholder immediately while they're investigating if there's a dispute, but the burden at that point is overwhelmingly on the merchant to prove the charge was legitimate and correct. And if there's still any doubt, Mastercard or Visa will issue the refund, furnish documentation to the merchant, and tell them to sue you in small claims court if they think payment is owed.
In stark contrast, American Express will demand copies of the receipt from YOU (the customer), demand nothing from the merchant until they're 100% satisfied, and will still probably side with the merchant absent overwhelming evidence to the contrary.
In my life, I've had two chargeback disputes with Amex... and lost both. One was careless stupidity on my part (though still blatantly wrong), the other was Amex showing just how anti-cardholder they really are.
The first time it happened (circa 2000), the clerk accidentally hit '0' twice when entering the amount into the credit card terminal, and turned my $13.90 purchase into a $139.00 purchase. I had a receipt showing that the price was ~$13.25 with ~$0.65 in sales tax, but because I didn't notice until a month later & signed the receipt, Amex refused to budge. When I challenged American Express to have the merchant produce anything resembling an itemized receipt showing PRECISELY $139.00 in purchases with a timestamp within an hour of my alleged $139.00 purchase, they refused. As far as they were concerned, all that mattered was the 2x4 inch nearly-illegible receipt printed by the credit card terminal with something that resembled a blue smudge of a signature on it that I admitted to having (in addition to the itemized receipt for 1/10 the amount). I cancelled my card over it in rage, and refused to do business with them for about 10 years.
Fast forward a decade. My employer required me to get an Amex corporate card as a condition of getting reimbursed on business trips. One morning, the cashier at a Waffle House ran the card through, then somehow screwed up the machine between the moment the charge went through and the moment the printer produced the receipt. She insisted that the charge didn't go through. I argued with her for 3 minutes (I heard the printer start, before the power cord short or whatever rebooted it), then gave in because I didn't have much of a choice. Sure enough, I got charged twice, about 3 minutes apart, for the same amount. This time, I was sure Amex would take my side, because the restaurant obviously didn't have a signed receipt from me for the first one, and there was no sane reason why somebody would have two ~$6.00 charges approximately 3 minutes apart. Goddamn if they didn't do it to me again, and refused to reverse the first charge. Their official excuse? I didn't have an unsigned copy of the first receipt. What. The. FUCK. That really, REALLY pissed me off. Yeah, my boss signed off on the override and told me it wasn't worth fighting with them over $6, but it was the moral principle of it.
So, if you're an AMEX cardholder, be warned: if anything goes wrong, American Express WILL NOT take your side. In fact, they won't necessarily even lift a finger to make the merchant defend the charge. They'll press YOU for receipts, and will disqualify your chargeback on the slightest technicality, but will let the merchant get away with almost anything short of blatant, systematic intentional fraud.
Re:What? (Score:4, Informative)
My AmEx experience has been the opposite.
Re:What? (Score:3, Informative)
I've had fraudulent charges refunded (each over $1000) for Amex and Visa. Amex was far, far easier and less stressful to deal with.
Comment removed (Score:4, Informative)