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Resolving Disputes with Merchants

Money & Debt

This article explains how to settle a dispute with a merchant if talking to them is not enough.

This excerpt from the Houston Bar Association's Consumer Law Handbook details how to handle a disagreement you have with a merchant. The four steps to address a merchant dispute include sending a letter, filing a complaint with the Better Business Bureau, going to mediation, or suing in justice court.

If I have a dispute with a merchant, what can I do?

Generally, most disputes with merchants can be settled by contacting the merchant and describing to the owner or manager what it is that you are unhappy about regarding your purchased goods or services. Sometimes this is not enough, and you may need to take other steps to resolve your dispute. A registered letter carries with it a message of commitment to your complaint and has a greater chance to end up in the hands of those who can help solve your problem.

    Suggestions for Resolving the Dispute

    1. Send a letter by registered mail;
    2. File a complaint with the Better Business Bureau and/or State Attorney General’s Office (send a copy of the letter to the merchant)
    3. Mediate your dispute with a third party; or
    4. File a claim in justice court (sometimes referred to as small claims court).

    When should I write a letter?

    If your dispute cannot be resolved by a simple visit or telephone call to the merchant, write a letter to the merchant detailing your complaint. Also, send the letter to the manufacturer of the product if the dispute concerns goods and not services. Your letter should be clear and concise. You should give the merchant information such as where and when you purchased the goods or where and when the service was provided. If possible you should also provide the name of anyone that assisted you at the store. For example, tell the merchant you purchased a Brand X four-slice toaster on January 2, 2014, at the Jiffy Store located at Elm and First Streets in Houston.

    Send a copy of your receipt for the purchase of the product with your letter. If you cannot find the receipt and if you paid by check or credit card, send a photocopy of the cancelled check or credit card receipt. Explain what is wrong with the product and tell the merchant what you want. “I would like a full refund of my money.” “I would like to have the product repaired so that it works as it was represented.” Give the merchant a reasonable but definite time to respond to your letter—for example, within thirty days after the date of receipt of your letter.

    Send a copy of your letter to the manufacturer of the product. Often, the product will include a warranty or booklet which will tell you where to send letters to the manufacturer. If the product does not include such information, address the letter to the Consumer Complaint Department at the manufacturer’s address.

    Be sure to send your letter by registered mail or certified mail, return receipt requested. You may do this by going to your local post office and filling out a green card and certified mail receipt. The post office will help you with this process. The cost to send a registered letter is around $10.00. Always keep a copy of the letter, mail receipt, and other pertinent documents for your files. Do not send any original documents.

    When should I file a complaint with the Better Business Bureau or the State Attorney General’s office?

    The Better Business Bureau of Metropolitan Houston accepts complaints about businesses from consumers. Many consumers inquire about a business’s status with the Better Business Bureau before dealing with a merchant. Reputable merchants do not want thick files of complaints that may discourage future customers from dealing with them. If you file a complaint with the Better Business Bureau, send a copy of the complaint to the merchant. This act may provide added incentive for the merchant to address your problem. You may also submit a complaint with the Better Business Bureau online.

    The address of the Better Business Bureau is:
    Better Business Bureau of Metropolitan Houston
    1333 W. Loop South, Ste. 1200
    Houston, Texas 77027
    Phone: 713-868-9500
    Fax: 713-867-4947

    When you make a complaint to the Better Business Bureau, make a complaint to the Consumer Protection Division of the Texas State Attorney General’s Office. You may submit your complaint in person, by mail, or electronically through the website.

    The address of the Texas State Attorney General’s Office is:
    Texas State Attorney General’s Office
    Consumer Protection Division
    P. O. Box 12548
    Austin, Texas 78711-2548
    Phone: 800-621-0508
    Houston Regional Office
    Phone: 713-223-5886
    808 Travis, Suite 1520

    What is mediation and how can it help me and when should I use justice court?

    Mediation is a process in which an impartial person, the mediator, facilitates communication between the parties to promote understanding among the parties, reconciliation, and settlement.

    Unlike other forms of dispute resolution in the courts, mediation is non-binding. There is no factfinding, decision, or opinion by the third-party mediator. One primary advantage of mediation is the ability of the parties to maintain responsibility for and control over their own dispute.

    The mediator facilitates in:

    • defining the issues
    • removing obstacles to communication 
    • exploring alternatives to resolution 
    • reaching an agreement.

    A mediator will allow each side to state their case and will provide each side with an objective opinion of the strengths and weaknesses of the case. 

    This can help facilitate a settlement by allowing each side to hear the strength of their case in a non-adversarial setting.

    If you have a complaint against the provider of services or a merchant of goods, resolving your disputes before going to the courthouse is most probably the least expensive and most efficient way to resolve your dispute. Harris County has the Dispute Resolution Center that provides mediation by trained volunteer mediators. The process provides the parties with an opportunity to express emotions or frustrations, which may be hindering negotiations, and to address underlying concerns in a controlled environment. Those involved present information to the mediator who discusses the issues with the parties as they work towards a solution. All parties have an equal voice in the process. The meeting usually lasts about two hours. This is a free service provided by the Houston Bar Association.

    To find out more about the Dispute Resolution Center, visit their website, write the Dispute Resolution Center, Inc., 49 San Jacinto, Suite 220, Houston, Texas 77002-1233; call them at 713-755-8274; or fax to 713-755-8885.

    When should I use justice court?

    If you have clear legal rights, many merchants will settle your claim before it is necessary for you to take legal action. However, if you have a strong case but attempts to settle out-of-court fail, justice court (formerly known as small claims court) can be an inexpensive and easy way to settle the dispute. Justice court gives you an opportunity to present your case directly to a judgeor jury without an attorney. However, it can involve more time and expense than you may want to expend. Evaluate your claim and your commitment to seek relief before taking legal action. Justice Court is appropriate for claims of $10,000* or less.

    If you are successful, you will be awarded your actual damages and your costs. You do not need a lawyer to file a claim in justice court. After you decide to sue in justice court, you must determine where to file your complaint. Generally, you must file your claim in the justice court where the business or person you are suing is located. Look in the phone book for the justice of the peace court where the business or person is located.

    The clerk of the court can help you with some questions, but read What Court Personnel Can and Cannot Do. Go to the court with the name of the person you want to sue or the agent of service for the business. (The Secretary of State will have the name for the agent of service for most companies—State Capitol Room, 1019 Brazos, Austin, Texas 78701, 512-463-5701). The court will give you a petition to complete. When you complete your petition, you will file it with the court with a fee (about $100, which includes filing and service fees). The court will have a sheriff or constable serve the defendant. If the defendant denies your claim, you will be given a trial date and an opportunity to present your facts. The defendant has a right to bring any claims against you within the court’s jurisdiction. Such claims might include failure to make payment. Be prepared, clear, and to the point. Bring all the necessary evidence — the product, the receipt, and any witnesses besides yourself. The judge or jury will listen to both sides and decide who wins.

    *Note that effective September 1, 2020, the maximum amount you can get in damages in small claims court has increased to $20,000 from $10,000. Learn more from this Texas Justice Court Training Center video, and read Texas Rules of Civil Procedure part 5.

    Related Articles

    Related Forms

  1. Consumer Law Handbook (Houston Bar Association)


    The Houston Bar Association's Consumer Law Handbook gives consumers a general guide to their rights.