Q: If a business receives an overpayment on an account from a customer, are they legally obliged to notify the customer?
This is a business in North Carolina that has "store credit" accounts, and then is paid against those balances by its customers. Also, if such an overpayment exists (or if a credit from another circumstance, such as refund on store credit exists) on the account, is it illegal to apply that overage to an outstanding balance? Is it illegal to never notify the customer of overpayments/credits and never apply that outstanding money to the customer's bills, but just leave it instead as an "open, unapplied credit"? Thank you. -- In regards to Mrs. Kurtz answer, I wanted to add that I've checked our customer contracts, such as they are, and there is no mention at all of overpayments or how excesses/refunds to the charge accounts should be applied. In such a case as there is no specification in our contracts, what is the legality then of withholding those overpayments, not applying them, and not notifying customers of their existence? Thanks.
A: The answer to this question depends on the terms and conditions of your credit account agreement. Most account agreements would allow application to an outstanding balance. However, if payments are made with a specific designation as to how they should be applied, it is questionable especially without contract authorization. If your contract allows you to apply to other outstanding invoices or to hold as an open unapplied credit, then that would be ok. Otherwise, it should be refunded to the customer or just obtain the customer's permission to apply to other invoices.
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