Firstly,

The 100-mile limitation does not apply if you made the purchase from your home. The limit applies to your location at the time of the purchase, not the location of the merchant. So, the 100-mile rule would not have applied here.

I think this limitation is similar to common limitations on out-of-town checks. Figuring out who is right is (and collecting from the customer) is a lot harder when the customer is on the other side of the country. I can conceive of situations where a merchant loses a dispute, but is in fact in the right. Collecting from out-of-state defendants is very difficult/expensive.

That said, it is true that few issuing banks enforce that rule, at least not for small-ish claims; they might be a bit more strict if you bought a car on your credit card while on vacation across the country. And if you claim you didn’t make the purchase at all, well, the 100-mile rule doesn’t apply there either.

As far as the 60-day limit in particular goes. I suspect whether or not you are going to get a refund depends on several factors:
1) Most important: the likelyhood the bank thinks they will be able to recover their money. This depends on the merchant’s contract with their bank, and is out of the issuing bank’s control.
2) Your profitibility to the issuing bank.
3) The nature of the complaint. (A dissatisfaction complaint six months later is going right in the circular file. A default complaint could have longer life.)

I, personally, have gotten a refund for a pre-paid vacation from a credit card bank (Chase) more than 60 days after purchase, and it certainly never hurts to try. (This happened to be the Windjammer Barefoot Cruises BK.) However, I fully expected to be rejected, and would have not have been upset in the least if they had refused the refund. (Many victims of that particular BK were refused.) There are clearly disclosed time limits, and I have no reason to be upset if the bank follows them. Also of note in my case is that I had travel insurance with default protection as a backstop; indeed the only reason I even filed the claim with the bank was because of TravelGuard’s insistence that I do so.

“When no goods or services are rendered in response to payment, then the credit card company is subject to refunding the money to the ccardholder/purchaser regardless of time elapsed since biling or purchase or how far away the merchant was. The idea was, whoever takes the customer’s moeny has some responsibility in the matter.”

So in this case it could be the credit card company and not Mr. Gibson who stands in line as a creditor of the bankrupt h otel.

However, MegaBank knows that at least some of Big Hotel’s customers may dispute their charges and win; or Big Hotel may take prepayments for rooms or deposits and then not be in a position to honor those reservations (as in the case of this bankruptcy). So MegaBank institutes a holdback, which may be in the form of an additional percentage of each transaction up to a maximum of $X hundred or thousand dollars; it may be the first $Y thousand dollars charged. The amount is theoretically negotiable in the same way a mortgage is negotiable; that is, you can ask for a different rate but don’t hold your breath. MegaBank will periodically review Big Hotel’s finances and increase or decrease the holdback amount as it evaluates the risk.

Legally, that money “belongs” to Bighotel, and is thus an asset in bankruptcy. However, it also serves as a kind of collateral, and thus it doesn’t get lumped in with all the other cash assets that BigHotel might have. The holdback money would be used strictly to pay credit card claims for rooms/services not delivered – credit card disputes – and any money left over would go to the Bankruptcy Court to dispose of as any other asset. If there isn’t enough to pay off the credits, then the credit card companies and the Megabanks of the world eat the excess cost – unless, of course, they themselves have reinsured themselves for this kind of situation

“Cardmember Benefits – Resolve Disputes with Merchants”

Clearly that means they will…um…”resolve disputes with merchants.” And paying money for a product or service that the merchant subsequently tells you they are not going to be delivering would obviously fall into the category of a dispute with a merchant, would it not?

Oh, and I just checked Capitol One, and here’s what I found there:

“DISPUTE A MERCHANT CHARGE:
Unable to resolve it with the merchant? There are many dispute situations, here are some typical situations where we can help you dispute a charge:

- You didn’t receive merchandise or services you paid for
- You didn’t receive a cash advance that went through at an ATM
- You canceled a service and you’re still being charged
- A credit you were supposed to receive didn’t show up on your statement
- The amount is wrong or you were charged for the same transaction twice”

As you can see, disputing a charge with a merchant IS part of cardholder benefits. In fact, not receiving the merchandise or services you paid for is listed as the number one type of situation Capitol One can help you with!

In any case, I can assure you there are numerous frequent readers of this forum who can tell of the many times we have disputed charges from merchants…sometimes successfully, other times not. But the fact remains that credit card companies DO offer merchant dispute resolution as a cardholder benefit. Do they come right out and mention every single situation that might result in a dispute? Of course not! They wouldn’t mention non-delivery of a pre-paid hotel anymore than they would mention ordering a diamond watch online, and not receiving it from the merchant. It’s just one example of the bazillions of merchant disputes that might come up in one’s lifetime.

The way I understand the “holdback” is that it’s kind of like a rolling escrow account, and the bank would be able to keep that (over all other creditors) provided the debts to the bank after refunding customers exceeded the amount held. But I’m sure that’s a messy detail for the bankruptcy lawyers to resolve — all the more reason to let that be an issue between large corporations and not something each customer has to manage…

I’m not an attorney, but I’m pretty sure a CC issuer doing a chargeback against corporation in bankruptcy protection would be in violation of federal bankruptcy code, anyway. This is why you might find that banks are reluctant to do it.

Here’s my suggestion for avoiding pre-payment: don’t patronize a property that requires you to prepay. If I have no choice but go to a property where I have to prepay, I do so through an agency or a tour company.