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How do clients ask for a refund through their banks ?

by kurosaki4d
4 replies
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Hello,

I currently have an online store using Stripe payment gateway. However, as some of you might know Stripe has a very low tolerance for refund requests.

That been said, there are some scammers a few and then that order and ask for a refund the next day through their bank ! Which is something i never thought was possible. I used to think that it's only possible to make a refund request through the gateway and website directly.

When Stripe receives a refund request from the bank they don't argue, they give the money back with no questions asked.

To help me understand these scammers better, i would like to know how exactly is it possible to ask for a refund through the bank, are there any specific procedures that someone should follow in order to get his refund or are the refund requests granted to anybody who ask for them ?

Thank you for your help !
#banks #clients #refund
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  • Profile picture of the author dave_hermansen
    They don't ask for a refund through their bank, they initiate a chargeback through the credit card they used (VISA. MasterCard, etc.) or they initiate one through PayPal if that is what they used to pay you.

    They always immediately return the funds to the customer and then it is up to the merchant to prove that the sale was legitimate. To do that, you need to show that the address matches what is on file for that person's credit card (your AVS settings in the payment gateway you are using should be set up to only allow address matches), the CVS code must match (again, the CVS settings in the payment gateway you are using should be set up to only allow matches) and you need to show proof that the package was delivered to that address (it's even better if you require a signature for delivery).

    After you have proven that the sale is legitimate, the funds will be removed from the customer's card (or PayPal account) again and deposited back into your account. Keep in mind that the customer can initiate a second refund request after providing some sort of proof of their own and start the process all over again (although I don't think I have ever had that happen).

    Perhaps the best way of preventing this is to use a fraud guarantee company like NoFraud or Signifyd. And, of course, to only ship to "Confirmed" addresses when the payment is made through PayPal.
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  • Profile picture of the author DigiXpert
    I assume in your case you are worried about customers initiating a chargeback for "Fraudulent Payment" and that mostly happen when customers do not recognize the charge. When a customer initiate a chargeback you have the option to send customer bank details about the purchase and prove that it is legitimate. Normally, shipping tracking information and product information which you have shipped to customer along with customer shipping address do the job and it helps a merchant to win the dispute.

    The high risk payment gets auto flagged if you are using shopify to host your online store which you can refund straight away to avoid disputes in future.
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  • Profile picture of the author Rob Hunsons
    banking system is on the client's side, so even one email sometimes is enough to get a refund.
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    • Profile picture of the author dave_hermansen
      Originally Posted by Rob Hunsons View Post

      banking system is on the client's side, so even one email sometimes is enough to get a refund.
      We have never lost a single chargeback where we were able to prove that AVS matched, CVS matched and we had proof of delivery. The only way you could lose is if it was "item as not described".
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