This was entirely written under the influence of ambien and hycodan syrup.
What type of due diligence are you performing?
Times suck, however, I’m pretty sure none of the retailers I use are willing to send me financials. But there has to be some steps that keep your investment somewhat secure. For instance, are you buying from one retailer or spreading purchases around?
The largest charge I’ve ever disputed was a $5000 deposit made to a company that was going to build a custom hutch/cellar for me. It was an Amex charge that I believe was five months old at the time of the dispute. The builder told me they were going out of business and would not be able to complete my project or refund my money, and that I should just dispute the charge on with my CC carrier. Amex was terrific in settling it. No pain. Five years later, the builder is still in business with an up-to-date website, so maybe they just low bid my project and wanted me to go away. Who knows.
Anyway, to bring my deviation back to point, with Amex, is there a dollar limit on a disputed charge or a range of charges with a specific vendor? I could easily throw some big dollars down with my good buddy at Centennial, or even JJBuckley if prudence dictates that I spread purchases around somewhat evenly. The next logical question is expiration of dispute protection. We’re paying now for (hopefully) Spring 2011 delivery. Is Amex still going to back for you on a big charge that’s 30-36 months old by the time you’re ready to give up?
What if during the next two years one of those retailers goes chapter 11 or worse. Am I now a creditor? Would Amex protect me then, or would I be thrown into group 3 behind employees and lawyers and accountants? If I were lucky enougt to receive a refund, or credit refund via Amex, could money I received be sucked away under some 90 day preferential payment bankruptsy law used to separate money from its right owners.
I always hear “Put it on AMEX and you’re covered”. But are you really covered when considering the unlikely scenario that your retailer has fallen on hard times?
Just one other thought.
WTF happens if if you wake up some morning between tomorrow and Spring of 2000 and AMEX is trading at a dollar. Chocolate jesus is on the tube giving a “I have a dream” speech on the merits of bailing out yet another failed banking institution.
hey denny, i think if you go on ebob and read the thread… i think on Carolina wine? there will be a lot of discussion of credit usage and trying to get money back on AMEX. A lot of people without money now thanks to AMEX
Times, they are a changing. Regardless of what you, I, or anyone (including AMEX, MC, VISA) say is the rule today, who knows tomorrow? I would approach this as if you will bear all the risk and if you find yourself in an untenable situation in 2011 or 12 and the CC company stands behind your purchase, consider yourself lucky.
This isn’t news or revealing, but only deal with the absolute top retailers even if it means paying up a little. Spread your purchases out. Like many have speculated, if it’s a big production wine, consider waiting. Very few of those will trade up very much IMO.
FWIW, MC made me whole on a $2800 transaction with Cellarbrokers last year 6 months after the purchase. There were some relatively minor hoops to jump through and I was never confident I would get to keep the chargeback until the final letter came. I wouldn’t count on it going forward.
Just another reason why the futures game is dying off. I could see it continuing for the Firsts and the BDX cults, but very little reason for the rest of BDX.
I don’t know as much as I clearly should about the economics of Bordeaux futures, but I thought the way it worked is that when the future is purchased the payment goes all the way to the chateau. If that is the case, then maybe the buyer is not taking on so much of the retailer’s credit risk but rather the producer’s risk. In other words, even if the retailer goes bankrupt, neither the buyer’s cash nor the wine can be used to satisfy the retailer’s debts, because the cash has already been paid to the chateau and the wine belongs to the buyer, not to the retailer. Anyone who can enlighten me about where (and when) the money goes and who actually owns the (right to receive the) wine?
Matt, I think your question is a very complicated one involving US & International contract and bankruptcy law and far beyond my knowledge base. However, it is clear to me that your scenario would be tedious and painful to deal with and probably not worth whatever you lost unless it was a very large number. Just hope you never get to that point.
Chris, I don’t mean this to sound harsh, but your comment smacks to me of someone who is simply dug in on the question of these futures and is not being practical. If a major retailer fails, the resolution of these issues is not going to be a question for an individual customer to resolve – it will need to be worked out by a receiver or liquidator who will be laboring under the threat of a class action lawsuit if customers are shortchanged.
I do think the question of what happens if a retailer fails is an interesting one. If I am right that the money is paid up the distribution chain all the way to the producer at the time of the purchase, the issue as between a domestic retailer and its customers should be a question of purely U.S. law. The retailer would have a right to receive x bottles following release and the customers as a group would have the right to receive y of those bottles from the retailer. The question would be whether any other class of creditors of the retailer would have a right to step ahead of the customer class with respect to that particular asset.
Matt - Like I said, far beyond my knowledge base. However, I can assure you that if I lose a case of some $70/btl. wine, the time required for me to chase it down would not be well spent doing so. Would I be upset and angry? Yes. Would I complain to the best of my abilities? Would I show up in court or hire an attorney to chase $840 lost? I sincerely doubt it.
I also doubt a retailer would help you in any way if they were bankrupt. Why mess with it at that point? Goodwill is worthless. If you’re asking from an academic/legal research point of view, then I too, would be curious to know the answer. I hope I never have to find out the hard way.
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