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January 12, 2007

Grandpa Beyerstein loathed and feared banks, the legacy edition

I don't knit. I don't care for yarn, or wool, or any fiber you can't eat. Needles, man. I've seen good people get hooked... So, I never touch any of that stuff, unless it has already been knitted into something cashmere.

However, The Yarn Harlot has opened my eyes to a great injustice: Blue Moon Fiber Arts a woman-owned small business of great renown in the among the knitting cognoscenti has been retroactively refused credit card order processing for its Rockin' Socks Club. (It's like the fruit of the month club for people who crave enough hand-dyed yarn to knit a pair socks.)

That means Blue Moon's (erstwhile) bank not only refused to process new credit card orders, but also unilaterally refunded the money of the last several hundred Sock Club customers--because a Sock Club must be some kind of scam.

The Yarn Harlot explains:

What has happened, and I confirmed all of this in a phone call with Tina [of Blue Moon], is unbelievable. Blue Moon needs a bank to accept their credit card orders. (Be warned that when I run the world, banks will be in charge of far less...but I digress.) When Blue Moon started accepting orders for the Sock Club recently, the bank flinched.

They contacted the Blue Moon and questioned the possibility of this being an actual business thing. Blue Moon explained to them the concept of a sock club, and the bank held a meeting.

Now, I was not a fly on the wall at that meeting, but oh, how I wish I had been. Over the course of said meeting, the bank decided, with the business information of Blue Moon in front of them and the concept (and CASH) of a "Sock Club" laid out, that.....and here is the incredible thing... (Perhaps you should take a deep breath or sit down or put down your cup of tea.)

They decided that it was not possible that this many people could be this interested in sock yarn (I know...I know) and that therefore, considering the complete impossibility of this being a legitimate business concept (can't you hear them? "This many people just can't want sock yarn!") that Blue Moon must be running a SCAM, and (holy moths I can scarcely type it) Shut. It. Down.

They rescinded Blue Moon's ability to take credit card money (that's right, a bank turned down money...) and (breath deeply) REFUNDED to customers all of the money that they had received for the Sock Club.

You ok?

I will assume, since I know that you are not stupid, my lovely readers, that I do not have to spell out for you what the emotional and financial consequences of a bank deciding to refund money to your last several hundred customers would mean to a business. Let's just have a moment of respect for the fact that Blue Moon is still coherent at all.

Now, the ladies at Blue Moon (and they are ladies, so my sister Erin, owner of a small business and the lucky recipient of several inexplicable bank decisions herself, would like to take this opportunity to ask you if a bank would have done this to a group of men?) are a clever and tough bunch, and they have already fixed it. They have sent out a letter to all of their customers (and asked bloggers to help spread the word) explaining that they need to make sure that they have received a refund, and sign up again for the Sock Club...with the new bank, which seems to have no issues with accepting money.

So, once again, if you signed up for the Sock Club, click through to the Yarn Harlot's post to find out what to do to make sure you keep your coveted spot in line for that sweet hand-dyed sock yarn.

[HT: Julia]

Comments

Read the story, but missed the name of the bank that rescinded credit card processing. It is?

Yes, we must know the name of the bank & its location -- and the bank president's name if possible. Several (thousand?) letters to this bank & the local press are in order to highlight this bank's use of discrimination & bad judgement.

I believe that PayPal has an easy set-up for accepting charge cards and with very competitive rates.

And yet I have a feeling that bank would have no problem processing orders for bottles of TrimSpa, which won't even keep your feet warm.

Blue Moon specifically declined to reveal the name of the bank. I'm not sure why. There's an animated discussion in the Yarn Harlot thread. Maybe somebody over there can shed light on their motives for not revealing the name of the bank.

at one point someone connected to the company said that their lawyers asked them not to name the bank because it might affect a lawsuit.

and I can totally stop any time I want. Pay no attention to the six baskets of yarn in my living room.

I want their names. I want their names so bad. I need to dump bitter mockery on the heads of these unbelievable idiots. I also need to never, ever trust them with a penny of my money.

This is the first time I've heard of a bank unilaterally deciding that some business must be a scam, and taking it upon themselves to reverse the charges on hundreds of transactions. AND THEY DIDN'T BOTHER TO ASK! THEY DIDN'T EVEN TAKE A MINUTE TO TYPE "SOCK YARN" INTO GOOGLE!

Is anyone else here wondering what the annual salaries are of the people (I'm being polite about their probable gender) who made this decision? Shouldn't they be asked to refund the money they've received? Because paying them to run a bank is far more obviously a scam than anything you can do with sock yarn.

Correction to the preceding: they did ask. And then they decided it was a scam anyway.

Sorry. That datum refused to stick to my brain. They asked, the nice yarn ladied explained, and they decided it was a scam anyway.

I really, really want their names.

THEY DIDN'T EVEN TAKE A MINUTE TO TYPE "SOCK YARN" INTO GOOGLE!

I just googled "sock yarn]" (yeah, with the typo even) and got over 1.2 million hits.

What a scam! {rolling eyes}

Banks, and also PayPal, periodically crack down on what they believe to be scams. Most consumers who possess credit cards are protected from fraud. The potential loss to consumers through fraud is often limited at $50 or $100. It's the banks that accept the risk of insuring the consumers against fraud. Thus, the banks have a strong incentive to deny merchant accounts to businesses that strike them as frauds. Most of the time, in my experience, the banks are quite lax about who they hand out merchant accounts to. However, from time to time, especially when losses from fraud increase past some critical threshold, banks will launch crack-downs on any business they think might be a fraud. It sounds like BlueMoon got caught up in a kind of anti-fraud hysteria.

BlueMoon may not want to reveal the name of the bank to the public, because the next bank they ask for a merchant account may be leery of giving a merchant account to a business that is known for taking grievences to the public.

Someone above mentioned PayPal as an alternative. It is not an alternative. It, too, occassionally engages in (what seem to me) excessive crack downs on fraud. In 2002, for instance, PayPal froze my account after a web design client sent me $1,000. I recall planning to use the money to pay rent, and then being frustrated when my PayPal account got frozen for 6 weeks.

Seconding Laurence: that's why my business doesn't accept PayPal. Or credit card charges. It's just too much hassle in exchange for slightly faster transfer times.

But I want to know who this bank is, even if the revelation occurs at the time the first brief is filed. Because I'm betting that a gang of irate knitters could throw a giant sock around the branch in which these asshats work. My sister knits, she's teaching my kid, and damn straight there's a market for a sock yarn club. Hell, there's probably a market for several competing types: hypoallergenic, monochrome...I could go on.

Banks.

I have two, one for my payroll and accounts payable and receivable, and a separate bank for processing the credit card payments my business sometimes receives, mostly from the US Gov reps.

In December, I deposited a rather large (six figure) check in the account that processes credit cards, thinking I would try them out for a while as my only bank. I was told the check, from off-island (Texas) would take 16 working days to clear. I told them no problem, I don't want cash back, and I don't need to use the funds right away.

Two days later, I get call from this bank: "Who wrote this check?" (My customer, a large federal contractor I perform subcontracting for). Why, I replied, is there a problem with the check? "We've had problems and the bank has lost a lot of money..." I don't know anything about any money the bank may have lost, I was told there was a 16 day hold on the check, while it cleared, HOW can you be at risk, I asked?

"Well, can you tell us who wrote this check ( a simple google search would have told them, it is a 3 billion dollar + a year corporation, fercrissakes.)

No, I won't tell you who wrote the check, unless you tell me what the problem is with the check. "I was asked to call you and find out about the check..."

Tell whoever told you to call, that I don't appreciate it, and it is no one's business but my own who my clients are. Tell them that for me, good day.

Crotchety ol' fart, I can be.

Banks....

Shocking story, but perhaps the amazing pricetag made the Bank suspect fraud. ($240.00) for yarn and patterns to make six pairs of socks. These kits are more expensive than drugs or pears.

I've gotten back into knitting after a many-year hiatus and have developed a skein-a-week sock yarn habit. (My mom and I just sprang for an outrageous quantity of cashmere yarn on eBay for the next three years' worth of Christmas gifts. Cashmere socks anyone?)

I'm outraged for the Blue Moon women and have signed up on their waiting list for the club. Without this controvery, I never would have heard of their business.

But never attribute to malice that which is adequately explained by stupidity. Someone didn't do their homework and is right now regretting their decision and has learned a lot from their big mistake. I would hate to see a job loss over this (worse, a promotion). At the very least, I hope they get lots of ribbing* for it.

* Knitting pun. I kill myself sometimes.

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