I paid in bitcoin, now I'm owed a refund. Can I demand it in bitcoin too?

36

5

This is, I suppose, a legal question so I should point out that I'm most interested in US and European law.

I made a payment to a company for a product more than a year ago in bitcoin. The amount that I paid then was equivalent to $75. Now the company has failed to provide the product and they and I both agree that I'm owed a refund. However, we disagree on the means.

The company wants to refund me - in bitcoin if I wish it - to the value of $75 of today's money. It seems to me though that I should be refunded what I paid: i.e. the same BTC value that I paid. The value of bitcoin has increased substantially since I made my original payment, meaning that the BTC amount I paid then is now worth 5-6 times more.

I happen to know (through their blog posts) that the company in question does keep stocks of bitcoin rather than converting them to a fiat currency, so they have benefited from this. That said, I don't think it should matter either way.

My logic

You can consider bitcoin in one of two ways: a) a currency or b) not a currency. The conclusion is the same either way. Let's explore both:

a) BTC is a currency

If BTC is a currency then this is an easy question. I should be refunded what I paid, in the currency in which I paid it.

b) BTC is not a currency

If a bitcoin is not currency then is it unarguably an asset. Surely in this case I have given a valuable asset to the company as my end of an implied contract for them to provide the goods. Given their failure to provide the goods, they must return the asset: not a fraction of it.

Fairness

I think that, regardless of the legal side, it's fair for me to receive a full refund. Given that bitcoin has increased in value, one of us has to profit from this. It seems very unfair to me that the company should profit from their failure, whilst at the same time preventing me from making that profit myself.

I appreciate that I'm not exactly neutral in this, so I'd like to know what others think. Am I being reasonable? If I am, do I have a legal leg to stand on?

Edit:

Having read through the responses, they seem to have one or both of two themes.

  1. "The price wasn't in BTC, it was in dollars with the option to pay this via bitcoin."
  2. "Being able to claim a refund of the original BTC amount would open the door to risk-free speculation."

For the first, this is open to interpretation. If I was being pernickety, I'd probably say this was down to the wording of the sale. However I agree that - practically - it's pretty obvious that $75 was the price and BTC was a payment method, along with Visa, Paypal etc.

The concept of "legal tender" is one that was raised too. For something to be "legal tender'' means that one may not refuse an offer to pay a debt with that currency. It doesn't talk about refunds though: if I'm owed €1000 by someone in the US then I must accept the dollar equivalent even if I'd rather Euros. This is still €1000 though, not "whatever €1000 was worth when I entered the agreement.''

For the second, that is indisputable and probably represents the biggest flaw in my position. I would point out that the refund is not my doing: I would rather have received my order but the company cancelled it. However, that probably makes no difference ultimately.

Thanks for all the opinions. It looks like the overwhelming consensus is that I am being unreasonable, so I'll give up on my demands and accept the refund.

CharlieB

Posted 2014-11-14T00:44:47.463

Reputation: 471

14When you bought the product did you agree to pay X bitcoins for it OR $75 that you could also pay in bitcoin? Were there any other payment options (paypal, visa, etc) available at that time? – George Kimionis – 2014-11-14T08:24:02.040

3How would this work if you were ordering internationally by credit card from a country that uses, say, Euros. Would you expect the same dollar amount refunded, or the same Euro amount? – xorsyst – 2014-11-14T10:57:59.833

4c) BTC is not a currency : the company exchanged it at the time of purchase at a rate you both agreed upon to the base currency, now you are owed a refund they convert the same base currency value back to bitcoin at the current rate. I think you know what you are suggesting is not fair or reasonable otherwise you wouldn't feel the need to justify it. – JamesRyan – 2014-11-14T16:10:54.490

@GeorgeKimionis I can't remember. There were other payment options to pay in dollars obviously, but I can't remember the wording of the payment and it's now offline. – CharlieB – 2014-11-14T17:41:31.947

2@JamesRyan I feel the need to justify it because the company disagrees with me. – CharlieB – 2014-11-14T17:45:25.077

@xorsyst I googled this but couldn't find an answer. Naively, I'd expect to get refunded in the currency I used. Say I'm in the US and I buy something from Europe. My card statement shows either "$X" OR "€Y using $-€ rate xxx". In the former case I'd expect X dollars back; in the latter I'd expect €Y, converted at the current rate. – CharlieB – 2014-11-14T18:01:51.727

3"Given that bitcoin has increased in value, one of us has to profit from this." This does not follow. Many merchants who accept BitCoins automatically immediately convert them into a local currency. If the merchant did this, then neither of you has profited -- unless they honoured your request, in which case you would profit and they would lose. – Jeremy – 2014-11-15T00:49:38.847

It is completely unreasonably to expect to make a massive profit from a refund! The whole point of a refund is to put you back into the position you were in before you spent the money. If you wanted to gamble on bitcoin prices, ordering something then asking for a refund is not the right way to do it. Is this hashfast? – Lembik – 2014-11-16T19:05:43.150

@Lembik Two words Contra proferentem (interpretation against the draftsman)

– Aron – 2014-11-18T03:53:16.590

@Aron Happily (or sadly) the law is not so simple. There are many principles and at any given time you have to argue why yours applies and why another seemingly contradictory one doesn't. In this case, we are asking which currency a refund should be in and if bitcoin is even a currency for the purposes of this discussion. My reply was not legal but merely answered the question of what was reasonable. It is reasonable to be made "whole" by a refund. It is not reasonable to either make a huge loss or profit which is what would have happened if bitcoins were used for refunds. – Lembik – 2014-11-18T13:11:14.297

@Lembik Your arguement maybe true that it is REASONABLE to refund USD. However from a trading commodity trading point of view, there is no difference between a fiat currency and a commodity. Failure to deliver by the delivery date is a failure to deliver. The original trade must be unwound. Even if you were to repay in USD you MUST repay with the carry cost of the USDBTC forward contract, which I could only peg against computing power code and electrical power cost. Not to mention the loss of optionality on the BTW position. – Aron – 2014-11-18T13:27:41.950

@Aron You make a very confident assertion but I don't think it can be relied on. You are right the original trade must be unwound. The question is what was the original trade? As I understand it the price was quoted in dollars and people were given the option to pay in the dollar equivalent of bitcoins. As has been said many times, if the value of bitcoins had plummeted, how would people interpret a refund that didn't cover the original dollar cost? Also, your argument seems to use the language of a trading exchange where this should be covered by standard consumer legislation. – Lembik – 2014-11-18T13:30:44.133

@Lembik hence it was up to the seller to define it as the contract drafter. The law is clear that if there is ambiguity (especially in a take it or leave it contract), then it resolves in whichever way benefits the receiver of the contract. My point is that there IS ambiguity in the original contract. – Aron – 2014-11-18T13:33:49.587

1@Aron Right, I understood your point. My point is that life is not so simple. There are a number of principles at play including one of reasonable expectations. Would the buyer have honestly expected to have made a loss if bitcoins had gone down in value and they had been due a refund for non-delivery? I, personally, would have been furious if that had happened and would have argued that I had not been made "whole" by the refund. I haven't seen the original contract. What exactly did it say about paying bitcoins? – Lembik – 2014-11-18T13:35:19.047

@Lembik NO. The OP did not expect non-delivery. It is only the seller who has the ability to estimate the likelihood of non-delivery, thus take a position to mitigate such a possibility. Such as taking a USDBTC option. – Aron – 2014-11-18T13:46:06.700

Let us continue this discussion in chat.

– Aron – 2014-11-18T13:48:04.603

4Having discussed this at some length... Aron and I disagree :) – Lembik – 2014-11-18T14:27:51.533

Answers

19

I made a payment to a company for a product more than a year ago in bitcoin. The amount that I paid then was equivalent to $75. Now the company has failed to provide the product and they and I both agree that I'm owed a refund. However, we disagree on the means.

The company wants to refund me - in bitcoin if I wish it - to the value of $75 of today's money. It seems to me though that I should be refunded what I paid: i.e. the same BTC value that I paid. The value of bitcoin has increased substantially since I made my original payment, meaning that the BTC amount I paid then is now worth 5-6 times more.

This is at complete odds with what you've just said; you say you paid $75 in Bitcoin. But you want $375-$450 refunded to you because the exchange rate is in your favour. Would you feel the same way if exchange rate was not in your favour? Undoubtedly, no.

I appreciate that I'm not exactly neutral in this, so I'd like to know what others think. Am I being reasonable? If I am, do I have a legal leg to stand on? ... I think that, regardless of the legal side, it's fair for me to receive a full refund.

I believe so too.

Given that bitcoin has increased in value, one of us has to profit from this. It seems very unfair to me that the company should profit from their failure, whilst at the same time preventing me from making that profit myself.

Forgive the acerbic response but I'm somewhat taken-aback that a sizable number feels Bitcoin is a currency when it suits, but an investment at other times, and at no time does the rationale stay consistent unless "someone is making a profit". That's what businesses do. But let's take Cointerra for example; they're bankrupt because they took orders when BTC was $750 and now repaying at $350 has destroyed them. So not all businesses are rolling the dice and winning.

You paid $75, you're owed $75 in refund.

I'm no legal expert, and no one here likely is, so it's certainly an opinion-based question.

EDIT: I'm not unsympathetic to customers being given the raw end of the deal in Bitcoin refunds. For example, BFL acted horrendously. I certainly think deliberate exchange tricks in the company's favor are wrong; though it all comes down to the terms agreed, and more opaquely, opinion.

Wizard Of Ozzie

Posted 2014-11-14T00:44:47.463

Reputation: 4 920

1Please remove "everyone" from your answer, many of us realize that it is unreasonable to claim "I sold some stock to buy this thing that I returned so you need to refund me more because APPL went up."

Now if I was a business I might look into Loss of Use, but that would be a conversation for your attorney IMH(IANAL)O – CoinEnablers – 2014-11-14T04:20:28.773

9I completely disagree with "You paid $75, you're owed $75 in refund." No he didn't; he paid 1 Bitcoin, so he's owed 1 Bitcoin in refund. The fact that 1 Bitcoin could have been exchanged for USD75 at the time is completely irrelevant to the transaction in question. – Richiban – 2014-11-14T12:09:59.963

7@Richiban The agreed upon price was in USD. – Taemyr – 2014-11-14T12:35:51.800

1That might have an effect on the outcome, true, but I don't see that in the original question? – Richiban – 2014-11-14T12:41:05.527

2In theory this base currency idea is fine but since bitcoin is not actually a recognised currency the base currency will be $ whether the price was specified in $ or bitcoin. – JamesRyan – 2014-11-14T13:11:38.143

1It seems that it boils down to whether or not the price was in dollars with BTC as an allowable method of payment, or whether it was in BTC which just happened to correspond to a particular dollar amount. Forgive the acerbic response but I'm somewhat taken-aback that a sizable number feels Bitcoin is a currency when it suits, but an investment at other times I don't see how this is surprising. Bitcoin is intended to be a currency and - like other currencies - it fluctuates w.r.t. others. People constantly speculate with forex: btc is the same but more volatile. – CharlieB – 2014-11-14T17:53:24.280

1@CoinEnablers This is not quite the same as "I sold some stock to buy this": the corresponding situation here is "I gave you some stock, in exchange for this". – CharlieB – 2014-11-14T17:57:20.410

1every website that I've seen that accepts multiple currencies has a base currency, and the option to display in the currency of your choosing. So it'd make sense to get back either $75 or the value of $75 in BTC. The chances are the company would use a payment gateway, that instantly sold the BTC for dollar value. – Daniel P – 2014-11-15T14:42:00.883

Nope...The seller has rights that extends upto the provisions in the contract. They were paid in BTC not USD, therefore the OP has the right to CHOOSE to be repaid in BTC, iff the seller did not originally specify which type of goods the refund is in. Indeed, it would also be REASONABLE to demand a refund in USD if the exchange swung the other way. http://en.wikipedia.org/wiki/Contra_proferentem This by the way is codified in EU LAW.

– Aron – 2014-11-18T04:01:23.270

@Aron Despite your confident assertions, this is not correct. In this case the price was in dollars. And as discussed, a reasonable person would not expect the buyer to be entering into risk free speculation on the USD BTC conversion rate at the potentially unlimited cost of the seller of bitcoin mining machines. – Lembik – 2014-11-19T11:01:36.997

@Lembik Firstly, unlimited risk trades are entered into everyday. Second of all, this is NOT an unlimited risk trade, it is limited by the value of the product that should have been delivered. One could argue, the company entered into a risk free trade of USD vs the future value of the product in a year...THAT doesn't sound fair either. – Aron – 2014-11-19T11:04:38.403

@Aron I disagree. Unlimited risk is not a normal part of the retail consumer world. You are thinking of professional traders who are governed by a separate set of rules and regulations. Second, the risk is the change in the conversation rate which is potentially unlimited. The value of the product in USD at the time of purchase would indeed by the right refund. – Lembik – 2014-11-19T11:13:55.727

@Lembik Where do you think "professional trading" came from? Industry. Corn exchanges. People brought and sold corn futures for centuries with unlimited risk. – Aron – 2014-11-19T11:17:02.007

@Aron This is not relevant. The point is that the law is different for retail consumers. This is partly because the common understanding of contractual terms is important. No one expects to enter into risk free conversation rate speculation when they put in an order for a consumer product. Therefore, when interpreting a contract this has to be taken into account. – Lembik – 2014-11-19T11:17:39.970

@Lembik Retail is just a more strict form of industry to protect "the little guy". It's a subset of day to day trade. – Aron – 2014-11-19T11:18:44.277

26

I am not a lawyer, but...

The Coinage Act of 1965, Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency... are legal tender for all debts, public charges, taxes, and dues."

In the USA all monetary debts can be paid in US dollars.

Second, while bitcoin is legally a payment method in the US, it does not have legal status as a currency. In the eyes of the law it's almost certain that the company will only be required to send you the original USD price of the item that you paid, regardless of the method of transfer. Legally speaking, you paid dollars through bitcoin, and the firm will return your USD, using the bitcoin payment method if you so wish. They also won't have to refund any expenses you incurred to get the money to them, like driving money, bid/ask spread you paid to buy BTC, PayPal fees, etc.

Btw, the original price was listed in US dollars, right? Not BTC.

I'd love to hear a small claims judge berate you for trying to, how can we say this, enjoy risk-free speculative gains through the abuse of company refund policies.

Indeed if this unethical method worked, I could always use BTC to buy something with a money back guarantee, and if BTC went up a lot, just ask for my BTC back and cash in! If BTC didn't rise, I'd just keep the goods I'd originally bought, or maybe ask for my refund in US dollars, Swiss francs, gold bullion, IMF special drawing rights, or maybe even hugs...

Mallory-Erik

Posted 2014-11-14T00:44:47.463

Reputation: 379

5Which highlights why Bitcoin is not really a functioning currency: it's way too volatile if you have to worry about value fluctuation on the timescale of a standard returns policy. – Almo – 2014-11-14T21:24:20.547

+1 how can we say this, enjoy risk-free speculative gains through the abuse of company refund policies. – Mark K Cowan – 2014-11-18T13:40:50.157

You're not enjoying risk-free speculation. If the seller is not the one to cancel the order, then the breach-of-contract liability is yours, in which case they can pass the currency exchange costs involved in processing your refund right back to you. If, however, the seller is the one who breaches the contract, then they are liable for returning you to the condition you would have been in had the contract never been executed (absent contractual stipulations to the contrary, of course.) The coinage act lets them pay damages in dollars if they choose, not skip out of paying them entirely. – Perkins – 2014-12-23T23:49:30.400

14

A refund should be issued using the same payment method that was used at the time of purchase.

This also serves an anti-fraud measure for the cases where a purchase was made on a stolen medium (eg a credit card) but the scammers request a refund in a different medium (eg cash) as soon as the payment goes through because all they want to do is take the money and run.

The actual value of a late refund should be defined by the merchant's base currency.

For brick and mortar stores dealing with fiat money this is easily defined by their geographical location (unless there is more than one valid currencies at the same physical location, as is the case for example with Malta). The same stands for online stores with a physical location. If everything happens online then a fair approach would be to issue a refund at the exact amount of the exact payment medium that was used at the time of the purchase. The latter can be problematic when dealing with currencies that have a volatile behavior against major currencies, for as long as it lasts; the antidote is diversification.

George Kimionis

Posted 2014-11-14T00:44:47.463

Reputation: 2 854

3Very good point George. – Wizard Of Ozzie – 2014-11-14T12:47:50.763

1The same method, but not the same raw number. If you paid 1 btc when the exchange rate was 1 btc = 1 {some stable store of value}, and the exchange rate is now 1 btc = 2 {same stable store of value}, then you should be able to get a refund of 0.5 btc. – morsecoder – 2015-04-17T21:17:01.617

10

Given that bitcoin has increased in value, one of us has to profit from this.

If you hold the bitcoins while the value goes up, you are the one entitled to profit from it, because you also risk holding while the value drops, and then you're the one stuck with the loss.

Imagine the 10,000 BTC pizza transaction were refunded now: would the purchaser be entitled to 10,000 BTC, or only the value of two pizzas today? If he were really entitled to the 10,000 BTC, that would also open up the door for fraud in the form of "buy something with BTC, if the exchange rate goes up, return it for a refund in BTC".

You should be entitled to a refund of the same real purchasing power of what you paid them. With USD, this is usually negligible (actually ~2%/year because of inflation; I could see you arguing that you should get a $76.50 value refund to account for the dropping value of fiat), so it makes sense to refund the exact amount you paid. With Bitcoin, the easiest way to track this over any non-trivial period of time is by referring back to its fiat value.

Tim S.

Posted 2014-11-14T00:44:47.463

Reputation: 4 249

Where possible, as it is here, the benefit from an increase in value should belong to the same party that took the risk of loss from a decrease in value and that should also be the party that decides whether to hold the volatile asset or not. Here, the merchant was holding the bitcoins, could have traded them or not traded them for other currencies as they wish, and bore the risk that the bitcoins would drop in value. They are entitled to the increase. (Imagine how pissed you'd be if the bitcoins dropped in value to near zero and you didn't get the product but instead got back the bitcoins!) – David Schwartz – 2017-04-14T23:12:20.597

6

Was there a sales contract?

https://en.bitcoin.it/wiki/How_to_accept_Bitcoin,_for_small_businesses#Contract points out the value of specifying the refund policy in such a contract.

(Personally I'd think this was a USD purchase, quoted in USD, to be refunded in USD, irrespective of how the value was transferred. But IANAL, and I'm not even American.)

Hugo

Posted 2014-11-14T00:44:47.463

Reputation: 61

4

It all depends on the what was the base-currency of the item when it was sold. That is what should be refunded. If it is not clear what the base currency was, then the one approach would be to simply reverse the steps of the exact same transaction.

user898617

Posted 2014-11-14T00:44:47.463

Reputation: 37

4

It doesn't matter what the currency you paid in is worth now compared to other currencies, I guess that's the problem of a volatile currency.

For example: If from here in the UK I bought something in USD for $30 and in 2 weeks I have that item refunded, I would expect to get $30 USD back, the GBP amount of money that actually leaves and arrives in my GBP bank account may well be different.

it's also not unfair, the person refunding you is not giving you back any more than you gave them, it's just what they are giving you back is now worth more.

Treborbob

Posted 2014-11-14T00:44:47.463

Reputation: 141

4

If BTC is a currency then this is an easy question. I should be refunded what I paid, in the currency in which I paid it.

Really? So if the Bitcoin system collapsed and Bitcoins had no value anymore, you wouldn't be entitled to any refund at all? That can't be right.

If a bitcoin is not currency then is it unarguably an asset. Surely in this case I have given a valuable asset to the company as my end of an implied contract for them to provide the goods. Given their failure to provide the goods, they must return the asset: not a fraction of it.

Really? So if you had traded, say, an apple for something, and then were due a refund a week later, they should give you the same apple? That can't be right.

You're entitled to a refund of equal value.

There's a reason it must be this way -- any other rule allows people to profit from their bad acts. For example, say I buy something for Bitcoin, the price of Bitcoin goes down, and then the vendor says "Sorry, can't ship that to you. We'll give you back the Bitcoins."

If you want to profit from the appreciation in Bitcoins, you must also take the risk that you will lose if their value depreciates.

Given that bitcoin has increased in value, one of us has to profit from this. It seems very unfair to me that the company should profit from their failure, whilst at the same time preventing me from making that profit myself.

They didn't prevent you from making that profit. At the same time you sent $75 worth to them, you could also have held $75 worth yourself. All you lost was the use of $75 for the time they held the money, which is a loss traditionally borne by the consumer, even if the vendor doesn't perform.

Also, your rule would make it basically impossible for vendors to accept payments in things like Bitcoins. They'd be vulnerable to customers returning things if the price of Bitcoin went up, and their customers would fear that the vendor might renege if the price goes down. That's no good for anyone.

David Schwartz

Posted 2014-11-14T00:44:47.463

Reputation: 48 957

2

The answer would depend on where the transaction took place. If it was in person in the US (people can use BitCoin to buy in some stores now), the business is legally able to pay in US currency, $75. The note on money "This note is legal tender for all debts public and private" is legal language stating that you must accept it within the US. If they pay in anything else, that's fine, but they have to agree with you on what the value of another currency is on that day. If it was an online transaction in another country, say, the UK, then the contract law of that country would apply.

The question of whether BitCoin is a currency or an asset really is moot because for one, debts are based on a currency neutral value unless specified otherwise in writing, and for another, US currency is not an "official" currency outside the US either (although, exactly like BitCoin, it is accepted as having value abroad), it all depends on what country you're in. The whole point of BitCoin is that it is a currency that is not tied to a country. If you're paying in BitCoin, you're accepting that it is a currency.

Long story short, if it was a US transaction, they can pay you $75 in dollars if they really want to, so I wouldn't push anything else.

Zack Stauber

Posted 2014-11-14T00:44:47.463

Reputation: 21

Just because it states that you can pay in US dollars, doesn't mean it has to be the US dollar value at the time of purchase. That depends on the size of debt, which is what we are debating here. – George Reith – 2014-11-17T10:43:38.340

2

You guys are all approaching this from the wrong angle. Property and contract law make it pretty straightforward.

The answer depends a lot on the terms of the sales contract. Specifically, how much liability the seller has for failure to deliver. Absent an agreement to the contrary, the seller is liable for any damages caused by failure to ship/deliver (Depending on when transfer of ownership takes place) the item, in the condition specified, by the date specified.

For example, if the item you ordered was something you needed to fulfill a contract with someone else, and their cancelling of the order caused you to default on that contract, absent a different agreement, they would be liable for your inability to fulfill your obligations.

In this case, the seller breached the contract, so ultimately the seller is liable for damages caused by said breach. That would include loss of opportunities and/or changes in value of the items exchanged. (This has a big pile of common-law precedent. Bitcoin is a new transfer method, not a new concept in property law. If it was in dollars they would, technically, owe you interest, it's just that dollars are stable enough that that's not usually a significant sum, and most people don't worry about it when this kind of thing happens.)

Now, everyone else's answers about legal tender and such do apply: You can't force them to pay you in Bitcoin. They can pay you the equivalent value in dollars if they choose. But there is good cause and good precedent for damages, so they may well owe you the full, current value of the bitcoins.

If the transaction is handled by them directly and not via a payment processor (who, presumably, performed their job correctly) then you have another avenue as well. The contract was never completed as agreed, and so the bitcoins in question are, legally, still yours. They can either give them back to you, or pay you for their current value at time of contract breach (plus interest if applicable)

All of this is, however, subject to the terms and conditions of the sales contract, which was probably presented to you at time of sale, and may well (very likely did) specifically disclaim this portion of their liability. (You did read the entire thing, right? And you kept a copy, right?)

Disclaimer: I am not a lawyer. I did, however, get good grades in my business law summary courses, which covered property and contract law rather nicely.

Note for the "risk free speculation" commentators: This cannot be reliably used for that, as it is dependent on the seller violating the terms of the sales agreement. Further, if the seller discovered that you were doing it on purpose, that would be negotiation in bad faith on the buyer's part and would shift the liability the other way. How to handle it in the case of the return policy is another matter, and should be stated in the sales agreement. If not, then it could end up going to court for arbitration, and the ruling would likely depend on the reason for the return and evidence (or lack thereof) of the buyer making the deal in bad faith.

Perkins

Posted 2014-11-14T00:44:47.463

Reputation: 121

I can't agree with you more. From a finance point of view, it could be argued that the seller benefited from exposure to the volatility of the BTC with zero cost. – Aron – 2014-11-18T03:28:26.500

2

Perkins is perhaps the closest to the mark that I can see.

But again a slight issue. The core of the issue comes from contract law.

Contra proferentem (interpretation against the draftsman)

Most of the answers here state that it is unfair that the OP in effect is now allowed "risk free speculation". However that is actually EXACTLY what the law says.

Given that the OP does not explicitly state in that there is a clause in the original transaction determining the method of refund, given that the transaction failed. Then the OP is ALLOWED to interpret the contract in any damned way he feels like (assuming it is a VALID and legal interpretation). The fact that his interpretation is governed on which way the USDBTC is irrelevant and moot, the seller (as the drafter of the agreement, should have specified in the agreement his terms).

The reasoning for this is that the seller was originally in the best legal position, as the drafter of the agreement to impose any terms he wishes to avoid losses.

Aron

Posted 2014-11-14T00:44:47.463

Reputation: 121

Oh, the OP can interpret the contract any way he feels like. But the seller can too. Either way, a judge still has to agree with a given interpretation for it to have any legal effect, and that won't happen unless the OP goes to court over $300 he never actually owned. Even then it's a bit iffy. – cHao – 2014-11-18T22:58:57.850

@cHao The point of Contra proterntem is that the courts will take the interpretation of the party that did not draft the contract. – Aron – 2014-11-19T07:46:39.560

s/will/might/. We don't know anything about the refund policy except that the OP hasn't said one existed. Lack of evidence != evidence of lack. Could be he just didn't look over the terms. – cHao – 2014-11-19T08:01:02.547

I didn't think to include this bit since the terms of the contract are unknown and I haven't seen one yet that doesn't at least try to disclaim liability for damages caused by the seller canceling an order, but it's good to have it listed here as it would probably matter. :) – Perkins – 2014-12-23T23:40:42.877

1

I think you would find it useful to know that PayPal honours the original exchange rate at the time of purchase (see here).

This is the behaviour I would expect if not otherwise stated in the Terms and Conditions of the vendor. You attempted to make an exchange of your Bitcoins in return for an item, the item was never received therefore the Bitcoins should be returned.

The price was in Bitcoins, because you paid in Bitcoins therefore the company took Bitcoins off you and not the equivalent in another currency. Whether the company sets the value of Bitcoins based against their exchange rate with another currency is entirely irrelevant, you did not pay using that currency.

Quite simply no exchange ever occurred here, you paid in Bitcoins, you will recieve Bitcoins back, I don't see how the vendor has any right to adjust the number of Bitcoins it will return because the market is favourable to do so. You swapped those Bitcoins for an item, not $75, you didn't receive the item. Simple.

Edit:

There seems to be some misunderstanding related to the fact that the vendor is situated in the US and that USD must be accepted (others have stated, I can't guarantee this).

What the law does not state is the amount of USD required to settle a debt, all it is saying is that a dollar equivalent must be provided. The debt here is 1 bitcoin, and the dollar equivalent is clearly not $75.

Please stop calling bitcoins a method of payment and not a currency. They are not a method; direct debit, standing order and bank transfer are all methods of payment, bitcoin is a currency in this regard as it is an asset that the vendor is willing to accept a quantity of in exchange for their goods. Bitcoins are the input to the method in this regard.

Many of you even state that bitcoin is an accepted currency by currency exchanges. Yet go on to state that it is just a method of payment later. You can call it skeumorphism by referring to your bitcoin cache as a wallet, but everywhere else we are treating this thing like a currency, if we then want to claim it isn't is it really so surprising that is as volatile as is?

Volatility is caused by uncertainty, and this is a prime example of why people are uncertain about bitcoin. There's examples of extremely volatile major government backed currencies out there, I don't see how volatility is an argument against its status.

George Reith

Posted 2014-11-14T00:44:47.463

Reputation: 119

2You go ahead and tell that company they owe a $375 refund on a $75 item. See how long they keep accepting bitcoins. – cHao – 2014-11-16T02:31:06.157

So if I trade an apple for something and two weeks later the vendor has to issue a refund, I should get the two week old apple back? That can't be right. The rule has to be that they provide an apple of equal value, not the very same apple. – David Schwartz – 2014-11-16T08:19:54.743

@DavidSchwartz Comparing apples and oranges much? We aren't trading perishable goods here. The vendor should issue you an apple in the same condition as the one you gave. Hence my point that any loss the vendor accrues due to the state of the currency changing during a refund period is their loss. – George Reith – 2014-11-17T10:37:55.390

@cHao They owe an x bitcoin refund on an x bitcoin item. They received x bitcoins and therefore are not trading at a loss unless they have already invested that bitcoin elsewhere. If they have done so then they have taken the risk upon themselves. – George Reith – 2014-11-17T10:41:36.480

@GeorgeReith: There's no such thing as an "x bitcoin item". The "price" in bitcoins is just the real-money price * the current exchange rate. The company simply deals with someone that instantly converts those bitcoins to real money. – cHao – 2014-11-17T14:54:14.227

@cHao Unless explicitly stated by the vendor this is not the case. Define the real price, what is this authoritarian exchange rate you speak of? Exchange rates are subjective and there are many. It is an x bitcoin item because the person traded x bitcoins for it. Frankly if paypal, one of the largest global payment services operates this way then I would be more inclined to agree with their policy than your baseless statement that there is no such thing as an 'x' bitcoin costing item. – George Reith – 2014-11-17T15:09:25.953

@GeorgeReith: Umm...far as i've seen yet, Paypal doesn't operate that way. There's a lot of noise about it, but (1) i've yet to see an option to enable it in my merchant account, and (2) it's still just another payment method, not currency. – cHao – 2014-11-17T21:03:20.330

1As far as the real price, it's the price they list before you choose a payment method/currency. Show me a serious retailer that lists their prices in bitcoins. – cHao – 2014-11-17T21:40:30.880

@cHao It clearly states it on the page I linked. It's not an option, it's just what happens. The refundee gets the exchange rate originally granted at purchase. You wouldn't notice it as Paypal does the exchange. – George Reith – 2014-11-17T21:59:54.893

1Assuming that Paypal considers bitcoins as currency. Which does not seem to be the case. If it were, there would be an option to disable it, since quite a lot of businesses would want to avoid the risk of 400% value fluctuation over a year and a half. – cHao – 2014-11-17T22:01:24.243

@cHao I'm referring to how it operates on exchange rates which is what this is an issue about. The vendor clearly considers it a currency because they accept it as a form of payment. Enough comments about this dude, this debate is becoming silly and pedantic. – George Reith – 2014-11-17T22:03:32.763

2They accept it as a form of payment. The payment itself is in real money. If they considered bitcoins as currency, it would be listed wherever the other currency types are listed, and your account would have a bitcoin balance. – cHao – 2014-11-17T22:07:52.443

1

I agree with George Reith.

"I don't see how the vendor has any right to adjust the number of Bitcoins it will return because the market is favourable to do so. "

However, if this was a matter of doing what is morally correct, what do you think is the right thing to ask for in return? The $75 you paid in bitcoin, or the amount of bitcoin you paid to accommodate the $75. As said but to reverse whats being said in this debate, and make it glaringly clear, if the amount had lowered where 1 bitcoin = $75 on day of the purchase, but then today 1 bitcoin = only $0.25 What do you think said company would do then? Do you think they would refund the sale in $75 USD? No, I think THEY would then reverse the bitcoin transaction and not lose $74.75 since business is business which is about making money, not losing it. With that same logic, since that's precisely what the company in question would have done, the buyer has a right demand a refund in whichever currency they choose. Why? Because the customer is always right, and that's also good business. What if the name of this company got out about how they failed to follow through both without a product AND without a valid a refund. That can potentially lose them lots more than $75 or $475. Again, use the logic they would, and defend your position that you have the right to ask for your $0.25 back as much as you can ask for your $4,000.75. They would have done the same to you, but you are the customer, so ask to be treated fairly as such.

(I really just want to see the guy get his nice bitcoin markup the way the end user should from the frustration of the argument in the first place. I mean the guys handle is CharlieB like Charlie Bucket for crying out loud.)

GarfieldTheGreat

Posted 2014-11-14T00:44:47.463

Reputation: 19

They would refund the sale as $75 USD or face lawsuits. The price is in USD, and bitcoins are just a payment method. Even if the exchange rate were in their favor, it doesn't matter -- debts in the US are measured in USD. – cHao – 2014-11-16T02:24:17.027

1

If you pay X amount of bitcoins you should get back the exact same amount regardless of its market value. This is no different that with any other currencies. The value of the dollar or/and the Europe, for example, also fluctuate on a daily basis and stores don't go around refunding people based of their absolute value for a particular day. What this store is doing is unscrupulous and it sets out a very bad precedent. If I anyone can have the choice to cancel transactions because they don't benefit from them because of the increase/decrease of the valuation of the currency used, then this will open a pandora's box. Especially with currencies that fluctuate dramatically like bitcoins sometimes does. If I lend you $100 when the value of the dollar in the market is 0.85 cents, you still have to pay me back $100 even if at the time for you to repay me the value of the dollar is more or is less. That's the way we have always done it so I don't see why we should start treating bitcoins transactions differently. You paid X amount of currency Y therefore you should get the same exact amount of X of Y back. Moreover, if the transaction had happened the way it was supposed to have happened, the vendor would've been the loser in the sense that he sold a product for what consumers were willing to pay that specific day but later on, for normal economic reasons that define the laws of demand and supply, that product's price went up and now people are willing to pay more for that product. Again, by allowing this merchant to cancel or not to cancel based on either, prices fluctuations, or/and, the value of the currency used days after the original transaction has happened, would set a precedent that could mess up our way of doing business transactions. You should fight this guy all the way to the end. Moreover, I would strongly suggest that you share this merchant's name with us so we can all keep an eye opened for cancellations of this type.

Walter Santiago

Posted 2014-11-14T00:44:47.463

Reputation: 11

1Consider breaking this up into paragraphs. Right now it's a wall-o-text that i'd dread trying to read. – cHao – 2014-11-17T21:32:06.937

Can you make this easier to read? Possibly with some formatting like italics, bold or a bullet list? – Scott – 2014-11-21T14:33:41.493

1

Obviously, this response is 3 years too late, but...

1) this kind of nonsense is exactly on of the reasons vendors hesitate to use BTC.

2) ask yourself this, what form would you want to get refunded if BTC exchange rate was down rather than up. If you can honestly say that you would be happy with BTC return, then you are right to feel indigent about the situation, otherwise, cut the vendor some slack.

3) in that the vendor's de facto product price is USD, in fairness (legal or not), their refund should be in USD. when they start pricing in BTC, then in fairness, you refund should be BTC.

4) you should be happy that they don't refund in BS "store credit"

codechimp

Posted 2014-11-14T00:44:47.463

Reputation: 121

I don't think your point 2 holds any weight. Sure, if the situation were differently he might feel differently. I don't see how that's relevant to this situation. Here, the vendor failed to perform. If there are two resolutions, we should prefer the one that's worse for the party that failed so they don't get a benefit from their own failure so as to discentivize future failures. If you screw up and you hurt me, too bad for you. If you screw up and you benefit me, too bad for you. Don't like it? Don't screw up. – David Schwartz – 2018-01-24T19:02:53.523

0

I am kind of surprised at this debate. I just checked the price of bitcoin vs the dollar a year ago, and found that was hovering around 410:

BTCUSD15NOV13

Therefore, the means of refund are of no importance since the rate today is almost identical to the rate a year ago. Noone stands to "win" from anything.

Oh and ten days later, it skyrocketed to 1000$. Had you made the purchase 10 days later, I guess you'd be fighting for USD refund instead right? In order to be the one who "wins from their failure".

Sneaky.

angelitto

Posted 2014-11-14T00:44:47.463

Reputation: 134

I don't think it's so much sneaky as wanting the cake and eating it too – Wizard Of Ozzie – 2014-11-14T12:49:09.060

1This was also my first thought, but this would only be true if it was exactly one year ago, but the OP said *"more than a year ago"*. It could be one and a half year ago. – Peter Mortensen – 2014-11-14T18:57:03.460

0

Honestly (and, I have not read right through every answer) IMHO, if I give you a $20 note and, if in a year you need to refund me you give me a $20 note. It does not matter what happens to the value of a $20 note in that time (it's purchasing power increases or decreases), what matters is what it represents. If you had paid with a bag of apples because that was your agreement then you should be able to expect a bag of apples back.

The only undoing is that no one is obliged to repay their debt with Bitcoin since, as noted in other answers, US legal tender is valid for all debts (in US jurisdiction). I suppose given this that it would be valid to say, "Hey, we owe you $75 - how about if we send it to you in Bitcoin instead of cash?" or, apples.

The other position is equally as valid. From the perspective of the merchant, you owed him $75. He does not see it that you sent him 0.1BTC (whatever the actual amount), what he sees is you sent him $75 worth of BTC.

Willtech

Posted 2014-11-14T00:44:47.463

Reputation: 2 878

-1

I agree. Interest is a common lingo for any currency not refunded on time if you were supposed to receive the product a long time ago. I just made a similar purchase with bitcoin money that I didn't have ?? Maybe the company will not ship the product then? It says order confirmation. I emailed the manufacturer. It seems like the company would have a cruel website to suggest to me that bitcoin was an option just like paypal credit. They don't seem like a cruel company by nature.

Katie

Posted 2014-11-14T00:44:47.463

Reputation: 1

Hello Katie, welcome to Bitcoin Stackexchange. Stackexchange is quite different from a forum, instead it's a question and answer platform. Answers are meant to independently and comprehensively address the question that started the topic. You can get an overview here: [tour]. – Murch – 2017-08-07T17:46:31.250