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Businesses Software

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."
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Salesforce, a Pillow Maker and a $125k AmEx Bill

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  • What? (Score:5, Funny)

    by ArchieBunker ( 132337 ) on Friday April 26, 2013 @04:06PM (#43561697)

    Clearly news for nerds, a boring legal battle in a slightly incomprehensible summary.

    • Re:What? (Score:5, Funny)

      by Lunix Nutcase ( 1092239 ) on Friday April 26, 2013 @04:07PM (#43561713)

      This story sponsored by: Dice.com

    • Summary says "complex 3-way legal battle" so expect the summary to gloss over the details.

    • Re:What? (Score:5, Informative)

      by gl4ss ( 559668 ) on Friday April 26, 2013 @04:23PM (#43561875) Homepage Journal

      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:What? (Score:5, Funny)

        by Anonymous Coward on Friday April 26, 2013 @04:29PM (#43561929)

        "it's a threeway bullshit throwing battle."

        Well, technically it's a pillow fight.

      • by EvilSS ( 557649 )
        "tracking effectiveness of every single 15-30sec tv advertisement, so their product request was bullshit as well."

        The request wasn't bullshit, but going to Salesforce for this is. There are media and marketing companies that can do this for you (Neilsen for one, but there are other, lower tier companies that can as well), and it doesn't require some custom solution to do it. It's like having a ceramics factory built because you need some new toilets.
      • by Qzukk ( 229616 )

        did their sales go up or not?

        How the hell would they know? The thing they paid for to tell them didn't work!

        • Re:What? (Score:4, Funny)

          by Jarik C-Bol ( 894741 ) on Saturday April 27, 2013 @01:30AM (#43565065)
          The trick I found always works is to go look in the warehouse. If there was 'a whole lot of pillows', and now there is only 'sort of a lot', or maybe even 'only a few' then your sales went up. If on the other hand, there is 'just heaps of pillows everywhere' It means your customers are returning your product faster than you are shipping them out, and your business is about to fail, because seriously, who buys a pillow from a half hour infomercial? I'm saving my money for the Ginsu knife!
          • That isn't what they are looking for. What I believe they want to know is does this particular ad on this show at this time generate more orders than running the ad on another show at a different time. So they need to know when ads are running and how many orders come in after that ad (say for the next 30 minutes) or maybe they have different phone numbers for different ads. I recall hearing about some company that focused on doing those cheap products sold in the TV ads. They had software that tracked all
      • Re:What? (Score:4, Informative)

        by sphealey ( 2855 ) on Friday April 26, 2013 @05:41PM (#43562555)

        = = = but why would someone spot their company 125k of cash on a credit card? = = =

        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

        • A *lot* of Worldcom employees got burned by that seeming technicality. They made business trips during the company's final days with their Worldcom Amex card, then when the company declared bankruptcy, all reimbursements were frozen, and there were rumors that employees might even have to pay back expenses that were previously reimbursed over the previous 5 months.

          In the end, the court had mercy on the non-executive employees who were at risk of getting laid off with an unreimbursed $5-10k Amex bill to boot

      • Re:What? (Score:5, Informative)

        by Miamicanes ( 730264 ) on Friday April 26, 2013 @10:37PM (#43564371)

        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:5, Informative)

      by Bigby ( 659157 ) on Friday April 26, 2013 @04:40PM (#43562033)

      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:What? (Score:5, Insightful)

        by BitZtream ( 692029 ) on Friday April 26, 2013 @05:51PM (#43562621)

        This sort of contract dispute is something I deal with daily. Not in that I deal with disputes, but I'm continually trying to teach my management how to write a contract that is actually enforcable.

        IF (big if) the contract is worded as "tracking effectiveness of every single 15-30sec tv advertisement" then both sides failed.

        That sort of statement is why this situations happen. MyPillow.com told salesforce.com thats what they wanted. Salesforce says 'okay' because they can do that. MyPillow.com sees the final results and then only at the moment do both of them start to realize that they have TOTALLY AND COMPLETELY DIFFERENT ideas about what that statement actually means.

        Then you end up in court while a judge sits there and thinks 'both of you are fucking idiots for being so vague' then eventually figures out which one of them is the bigger douche and makes a decision.

        Theoretical Example:

        MyPillow.com was expecting to know exactly how many sales came from each advertisement right down to which ad made which person (by name) buy a pillow from them. This is certainly doable from a technical stand point.

        Salesforce.com was thinking that an average based on industry standard formula that they've been using for years based on Neilson ratings was what MyPillow.com was expecting, as it is technically correct as well.

        When salesforce gives mypillow some aggregate averaged/projected data, and not a break down of customer names related to commercial airings ... then shit starts to hit the fan and both sides start talking about not paying. Neither side was technically 'wrong', but both of them clearly didn't do their due diligence did they? In this particular scenario, Salesforce would likely win as well because it DOES meet that CONTRACT REQUIREMENTS to the letter, unless the judge decides that salesforce, having done this many times before, should have known better and in their roles as consultants they were legally obligated to inform them of the potential confusion, so maybe not!

        You can rest assured that the contract's specifications are so vague that this cause is not going to be an overnight thing.

        • Either MyPillow.com was stupid, or the money was insignificant to them, else why pay $125k up front in order to get a supplier to deliver when they had already failed to deliver on time?
      • I actually had to read the article to figure this out:

        I feel your pain, brother.

  • Miles (Score:5, Informative)

    by Anonymous Coward on Friday April 26, 2013 @04:10PM (#43561737)

    I'm sure the employee wanted the miles.

    • That's what we do. Corporate credit cards are a real pain in the ass to get if you're a small company. We (small business) use personal cards and have the bill sent to the office. The employee gets to keep the airline miles or whatever bonus is attached to the card. Given that I have about $4k/month in expenses that flow through there, it adds up fast and it's a win/win all around.

      • Re: (Score:3, Interesting)

        by ArsonSmith ( 13997 )

        Corporate credit cards are actually no different that personal credit cards. The company has no obligation to pay it and it's your credit that gets f'ed if the decide to renig on what they said they'd pay for.

  • by Curate ( 783077 ) <craigbarkhouse@outlook.com> on Friday April 26, 2013 @04:17PM (#43561809)
    The lawyers.
  • What an executive of my pillow with a personal credit card with a credit limit higher than 125K paid it to some vendor of my pillow. Acting as the official of the company he offered to pay 125k in company check but the vendor refused to take a check. Even if he gave the vendor money from his creditcard, he should have issued that 125 k check from the company and deposited it into his account. But for some reason he did not. How did this chump get a card with higher than 125 k limit I cant understand. Fools
    • On Aug. 1, Salesforce.com "attempted to take its systems live for My Pillow" but more than 100 components "were not functional," his suit adds. Furlong subsequently disputed the $125,000 charge with American Express, and Salesforce.com credited back the amount, the filing states

      I know, I know... Reading the actual story and all...

      • by dbraden ( 214956 )

        Also found in the story:

        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.

      • I know, I know... Reading the actual story and all...

        Yea, you might try reading more than the first page:

        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.

    • Amex cards used to not have a limit when I had one. If you have good enough credit they just let you run up whatever bill you want. My father bought a house with one a long time ago due to some legal/work issues similar to this case. His employer was buying his previous house from him as part of an employee move, but the paperwork was taking too long and the new house had a 2nd offer. So he dropped it on his Amex and then paid off the bill a week later when the paperwork cleared. How he got money from the

    • I'm likely paid significantly lower than this executive, and definitely was paid WAY lower when I got a credit card from AmEx (Blue) and eventually granted a $25,000 limit. I could/can request higher. But I got it to buy a used car at a rate much lower (0.9%) than I could have gotten at a bank. So I would imagine someone who likely makes in mid-six figures or even low-mid could easily get up to that. I had/have awesome credit rating, so that helps too.
    • by tibit ( 1762298 )

      LOL about the vendor not taking a check. They lost a bunch of money on going through a credit card transaction.

  • Why? Easy! (Score:5, Insightful)

    by pla ( 258480 ) on Friday April 26, 2013 @04:25PM (#43561895) Journal
    and why the employee was naive enough to hand it over.

    For the same reason I'd do the same, in a frickin' heartbeat - $2500 in rewards dollars (and AmEx gives "real" dollars creditable to your account; not "miles", not "bux", not "flooz"). And in general, legit companies not on the brink of bankruptcy don't usually flake on their bills. Though sometimes... They do.

    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.
    • Re:Why? Easy! (Score:5, Informative)

      by Minwee ( 522556 ) <dcr@neverwhen.org> on Friday April 26, 2013 @04:39PM (#43562025) Homepage

      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,"

    • AmEx did reverse the charge after it was initially disputed. It wasn't until Salesforce went back to them with the contract that stipulated no refunds under any circumstances that AmEx reinstated the charge.

      • That seems hinky as amex does not allow merchants to stipulate that for amex transactions. Now salesforce may be big enough to have a one off agreement with amex.

    • by tlhIngan ( 30335 )

      and why the employee was naive enough to hand it over.

      For the same reason I'd do the same, in a frickin' heartbeat - $2500 in rewards dollars (and AmEx gives "real" dollars creditable to your account; not "miles", not "bux", not "flooz"). And in general, legit companies not on the brink of bankruptcy don't usually flake on their bills. Though sometimes... They do.

      It does surprise me that AmEx wouldn't reverse the charge, though - They have one of the most consumer-friendly (and practically

    • and why the slashdot faithful are naive enough to jump all over a hot button word that willfully slants a murky fandango

      Every time this kind of slashdot story passes editorial standards, somewhere a cluestick dies.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      This is common practice at startups, where they don't have rules in place against it like most (or all) larger companies. Employees can build up a really good credit rating, and get the rewards, by charging things to their card that the company reimburses.

  • by xxxJonBoyxxx ( 565205 ) on Friday April 26, 2013 @04:28PM (#43561917)

    >> there was an aggressive go-live date, a demand for immediate payment, and a (Salesforce.com) system that was ultimately 'not functional'.

    Wait, is Salesforce is stealing SAP's business plan?

  • Summary (Score:5, Informative)

    by Synerg1y ( 2169962 ) on Friday April 26, 2013 @04:32PM (#43561957)

    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.

    • by Ecuador ( 740021 )

      The employee's card being charged doesn't make my pillow look good either.

      It says that SF held the project hostage, they demanded that payment right then and there and My Pillow tried to cut them a check but they refused. Apparently their corporate card had less than $125k limit and the employee was happy to make a couple thousand dollars or so in rewards.

      If it is true that SF missed the deadlines twice and yet charged also twice the original estimate, I can't see how they could be suing for "damages"...

      • my main point there is that My Pillow could've changed up the requirements several times, or scope creeped significant new features in. We just don't know. SalesForce is a big company that I haven't heard a whole lot of negative about, while My Pillow used an employee's credit card.

        As far as credibility goes, I am very inclined to lean towards SF, though the article makes it sound like My Pillow is completely getting f'ed.

        And as far as the amount of 550k goes, it does seem excessive, but I think it may be

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          at what point does oneself have to assume responsibility for their actions?

          Whenever I see someone talking about "personal responsibility" its never the executive making decisions being asked to take responsibility. I'm guessing you figure that point comes after whatever point the boss thought it would be a good idea to use the employee's card.

    • "My pillow contracts sales force" is a set of words that don't make for particularly good reading.

      The vague nouns and verbs and homonyms make my head hurt...

  • by Solandri ( 704621 ) on Friday April 26, 2013 @04:37PM (#43561997)
    Be sure to specify exactly what happens if either party fails to fulfill their obligations under the contract. JEDEC failed to do so, and had no recourse when Rambus broke one of their rules and secretly patented stuff they heard being talked about at JEDEC for inclusion in an upcoming standard. The most they could do was kick Rambus out of JEDEC.

    Same goes for self-employed independent contractors. If your contract just says you'll be paid $x upon completing the specific work, you are screwed. They can delay paying you for months without consequence. At the very least you need to put accruing penalties for late payment in the contract. Ideally you'll also have dates after which you can take the contract to a court and immediately get a summary judgment instead of having to go through a trial. Without a solid contract, once you hand over the money (for prepaid work) or the work (for post-paid work), all your leverage is gone. You are completely at the mercy of the other party.

    Sounds like a poor contract is what happened here. Salesforce.com promised a lot and didn't deliver. My Pillow's contract didn't specify penalties or discounts/refunds for non-completion of work. Consequently all they could do was offer Salesforce.com more money to finish what they were supposed to have finished under the original contract. The opposite is possible too - that Salesforce.com did its beset to fulfill the contract, but My Pillow kept changing the requirements. In that case, the contract should've specified how many revisions to the requirements could be made, limits on how much they could change, and by what date they'd be finalized. Either way, it was a poor contract.
  • You just need to claim that you are a Mennonite, and for religious reasons you do not own a credit card. Generally employers know so little as to be unable to verify the check, and are usually too scare of state and federal laws around religious discrimination to mess with someone who has an education and a moderate level of affluence. (sorry to get all political, but people still take advantage of the poor on the assumption that they won't do anything about it)

  • Use your personal credit card for your company's expenses, you are a complete and utter moron.

    If your boss ever says, "So can I use your credit card to buy this expensive product for the company?" you say.... "Here is my resignation, good luck."

    • by geekoid ( 135745 )

      Depends.
      It would give you a good case to claim partial ownership.

      • Owning a unsecured debt against a company in bankruptcy is just about as far from partial ownership as you can get.

    • by uncqual ( 836337 )

      I'd probably just say "No" or "Why don't you use your card?" -- how the employer responds would inform my decision on what to do next.

    • For expenses of this sort, absolutely.

      Minor use of the "Hey, can you pick this up at Staples?" sort isn't unreasonable.

  • by Murdoch5 ( 1563847 ) on Friday April 26, 2013 @04:47PM (#43562077) Homepage
    This directly goes back to why you don't let anyone but the developers set the completion date for software. When ever your handed a deadline, the first thing you do is schedule a meeting right away and then throw the deadline out. If as a developer you can't set the deadline then walk away from the table, the reason a lot of software projects fail is because feature lack, bugs and crappy code. Most of those can be fixed by having the time you need to actually work on set code. As an embedded developer I would never allow anyone to set my deadlines, I put pride into my work and I'm not going to have it rushed by some marketing team or a project manager who knows nothing about programming embedded systems.
    • by geekoid ( 135745 )

      "..anyone but the developers set the completion date for software. "
      no, that doesn't work either. Unless you have a highly motivated staff working on something they love, you need to set some milestone and delivery dates. Naturally you listen to the developer and use it as a guide line.

      For example see: why this very case where the developer said he could get it done by Aug 1st.

      Sometimes the market or market windows determines finish by date, becasue is usually about money, not about solid code.

      Sadly.

  • by drwho ( 4190 ) on Saturday April 27, 2013 @01:42AM (#43565123) Homepage Journal

    Back in 1998, I was pushed into applying for a corporate AmEx card by my employers, a consulting company of moderate repute. The idea was that I would use this for expenses related to travel. When I read the agreement in full, and understood that it was my responsibility, rather than my employers, to pay the bill I declined to apply. Shortly thereafter, I heard from other people in the company that it was expecting them to charge various IT related expenses to the card, and was taking a very long time (over four months) to pay. This was clearly a credit-kiting scheme cooked up by corporate finance to support the company's cash flow. When I told my boss that not only had I not applied for the Amex card, but that I had no credit cards (true: I tore them up about a year before), I was treated with disdain. A few weeks later, I was asked to resign under the pretense of some irregularities in my job application (which I had been forced to fill out after I had been accepted by the company and switch coasts). For a variety of reasons, not the least of which is an NDA, I can't reveal the name of the employer. I can say that they were swept up in one acquisition after another, and few people remember the name fifteen years later. But I still remember how much I came to distrust them, starting with an employer trying to force loans from its employees. Beware!

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