Realllly Expensive Chargebacks

[Andrew Maule]

Does anyone know how something like this works..?

Imagine you own a site online where you sell digital goods. Someone shops at your page, puts 5-10 items at $100 each into their cart and checks out. Their bill comes to about $600 or something. Since all of these products are digital and only downloadable, could these people in the future do a chargeback of $600 and effectively leave you SOL?

How does it work with chargebacks that are bigger than the typical $27-$97. Same as anything else? Any way to protect yourself like that? What about protecting for services like freelance stuff?

Thanks!

[Eric Stanley]

Not sure about the digital product chargebacks -- depends on the payment processors policy et cetera.. but for freelancing, I deal with one thing -- will that be CASH or CHECK?

[Jeremy Kelsall]

If it is through paypal...you are damn right they can charge it back.

I had it happen to me! Someone bought every single product that I have ever sold in a span of 30 minutes, guess what happened next?

[traces2757]

Originally Posted by Jeremy Kelsall

If it is through paypal...you are damn right they can charge it back.

I had it happen to me! Someone bought every single product that I have ever sold in a span of 30 minutes, guess what happened next?

Well we all know what that person was doing...or trying to do. That's terrible.

[Andrew Maule]

Charge backs are so ridiculous. I'm seriously considering going the route of sending physical CDs like that other thread posted earlier today suggested. Reducing charge backs to ZERO is well worth the extra work, especially with a place that can automate/send the CDs.

[Jeremy Kelsall]

It's things like this that should not be on your mind

Listen, you are going to have refunds and you are going to have chargebacks. Show me the guy that doesn't and I will show you the guy that isn't pushing his sales hard enough

I understand wanting to not have a chargeback and refunds, but if you provide a good product and good customer service, there is really nothing more that you can do. If someone is a bottom feeder, they are a bottom feeder and will find a way to work the system regardless.

Originally Posted by mrsleep99

Charge backs are so ridiculous. I'm seriously considering going the route of sending physical CDs like that other thread posted earlier today suggested. Reducing charge backs to ZERO is well worth the extra work, especially with a place that can automate/send the CDs.

[jstover77]

Funny, I posted on another thread this same post. Here goes again.

I used to have issues with chargebacks and disputes in Paypal alot. I sell advertising, so it is very hard to keep everyone happy. Therefore, I have a good amount of disputes and chargebacks. This being said, if the refund is warranted I will give them it, no questions asked. The problem comes when I have people that order items which are high priced. They would have the services rendered and then a month down the road would do a chargeback. This always bugged me, but I thought it was just the price of doing business online. The problem came when I had a guy order $3,000 worth of services from me, received them, and then 2 months down the road did a chargeback. From my experience, I knew that I would loose 100% through Paypal on chargebacks, no matter how much information about the transaction I would provide.

What I came to find by talking to one of my contacts in the credit card business is that the consumer now wins chargebacks 88% of the time. Five years ago that percentage was 13%. I won't get into why that is, but I had to figure out another way.

My partner and I found a company called EchoSign (EchoSign Electronic Signature Service and Digital E-Signature Solution). What they do is send a document which the customer has to electronically sign. The document usually entails your terms of service, or a simple paragraph about how you do not give refunds, but will work with the customer until they are satisfied (something to that effect. I included my TOS, which includes the above statement. It is easily integratable into your payment processor.

Since I have been using this service I have not lost 1 dispute or chargeback. Even if I don't send the form to the customer, I inform Paypal that I use them, and BAM...money comes right back. PAypal loves electronic sigs it seems. It's great!!!

I hope this helps you or anyone else who wants to protect themselves from unscrupulous buyers. Especially those of us who sell intangible goods.

[Andrew Maule]

That's a great idea, I'll look more into this, thanks!!!