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Avoiding Chargebacks?


RhinoNick

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If you're getting a large percentage of charge backs it may be wise to look at the type of customer (audience) that's signing up for your services, and/or the payment processor that you're using. Perhaps look at fraud screening options.

 

As noted by Frank email web-bugs are generally disarmed but what you could do is change the account welcome email you use to provide no extra detail other than to log in to their client account and view their new account. Custom the client area so that they can print a copy for their own records.

 

That way you would have a record of them accessing their account if the charge-back reason is that they never received an account email etc..

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If you're getting a large percentage of charge backs it may be wise to look at the type of customer (audience) that's signing up for your services, and/or the payment processor that you're using. Perhaps look at fraud screening options.

 

As noted by Frank email web-bugs are generally disarmed but what you could do is change the account welcome email you use to provide no extra detail other than to log in to their client account and view their new account. Custom the client area so that they can print a copy for their own records.

 

That way you would have a record of them accessing their account if the charge-back reason is that they never received an account email etc..

 

 

Hello Damo,

 

We haven't received any and we do preform some strict fraud checks, but we just want to know how to help combat them before they happen. I was thinking of making it only available online which would help favor the provider.

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The strongest TOS isn't going to protect from chargebacks. The card issuer is the arbiter, meaning there is already an anti-merchant bias. I imagine having a signed TOS might be of benefit, but that will probably reduce sales when a client can go to any number of other hosts and avoid having to fax/email a copy of the TOS with signature.

 

In a local, high dollar situation I would probably have a TOS signed, but for a discount host (I guess we fall into that category) it's not worth the effort--you just have to consider chargebacks a cost of doing business.

 

We have very few, maybe 3-4 per year out of probably 5000 or more transactions. Each time it irritates the heck out of me, because it's always either someone not paying attention to valid charges on their statement, or someone who decides they don't want to be bound to the commitment they made when signing up.

 

Sometimes we have clients who are made up of teams where the web team is using a company card, and the company charges the payment back because they hadn't heard of our company. Sometimes it's a customer who forgets to cancel within the 30 day money back guarantee and doesn't want to honor the TOS to which he agreed when signing up. Or a customer forgets to cancel before a renewal is charged, and doesn't want to honor the "no refund beyond the 30 day money back guarantee" portion of the TOS.

 

If you plan to grow a hosting business, you are going to have chargebacks, and you're going to lose some of them, maybe even most of them. Price it into your rates if you are concerned about it. The payment processor you use will have little if any impact on chargeback disputes, since it is the card issuer that makes the decision. About the only impact I can surmise the merchant processor having is in how the dispute information you provide is communicated to the card issuer, and whether that has any influence on the outcome would be hard to determine.

Edited by Troy
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