How do you fight charge backs?

by 3Ddude
18 replies
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I never had problems before but for Mothers Day I got hit with 3 very large charge backs. It stinks because I end up losing the merchandise and eating the fees to credit card fraud. One of the orders I was very pro-active on letting the bank know before they even caught it.

How do you fight charge backs? Is there anyway to reduce the risk?

#backs #charge #fight
  • Profile picture of the author CynthiaAngel
    Believe me I know, it sucks balls.

    I once posted on here the same issue of charge backs. The advice I got is to always send the merchandise with signature delivery. So I now do that for all merchandise over $50.00.

    What was the basis of the charge back?
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  • Profile picture of the author Indieage
    Do you have anymore info about the charge back? They can occur for any number of reasons... If you want, shoot me a PM with the details of it and I'll check it out and give you a few tips to better protect yourself.

    - Dan
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  • You can always fight a charge back.

    If it was that they 'never received it' you can always give them a tracking number that shows delivery - as has been suggested.

    If it a service - you can send them the terms of service that they have signed - that goes into what THEY have to do with the service as well.

    But as others have said, we need to know the nature of the chargeback.
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  • Profile picture of the author malia
    Charge backs are brutal. The credit card processors always side with the customer.
    The credit card processor doesn't "side with the customer", they merely follow (to the letter) the regulations of Visa, Mastercard, AmEx, Discover, etc.

    Visa publishes a chargeback management guide for merchants, you can get a copy. It covers all chargeback reason codes and all valid defenses to each reason code. This is the Visa regulation, however, AmEx, Mastercard are very similar.

    You can only fight a chargeback with a valid, acceptable defense to the reason code. Period, end of story. In some cases, the cardholder can rebut your defense (re-present the chargeback), it goes through a second cycle, then after that point you can only fight with pre-arbitration which is costly and almost never results in a win for the merchant.

    I don't like posts like this because it keeps merchants ignorant of the rules and perpetuates ideas of "fairniess" or "arbitrary decision making" as though these things are decided based on whim and personal opinion.

    They are not.

    There are rules and they are firm. Know them if you want to use them to your advantage.

    Lastly, if you knew a chargeback was coming, you actually should have pre-emptively refunded instead of letting that chargeback hit your account and affect your risk profile.
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  • Profile picture of the author planbpayments
    as Auctiondebteliminator rightly said, you can always dispute a chargeback if the customer receives the product and still files for a CB.
    If the CB is because of affiliate fraud, you can always ask your processor for a 3D secure account. That might help

    High Risk CC Merchant Accounts, Alternative Payment Solutions
    Offshore Bank Accounts and Incorporations.
    Email -

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  • Profile picture of the author 3Ddude
    In almost all cases, the charge backs were filed because the credit card numbers were stolen. So they get the info, or steal the card, jump on our site and order stuff. Then the card holder finds out his information has been breached and files a charge back. So we have to refund the money and we are also out the merchandise.

    We try to look for:

    - Matching Ship To and Bill To addresses
    - Making sure IP's map out to credit card location
    - Make sure phone numbers match to CC Info
    - Double check e-mail addresses, if they are throw away .yahoo, .gmail, .outlook etc...
    - Lately, we call questionable orders and try to speak with a live person to get authorization.

    Despite our efforts, the merchants give us the proverbial finger and make us pay.
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  • Profile picture of the author dvduval
    If it involves a large amount of money, I require them to send me a check or similar so I have cash in the bank. For smaller amounts I expect there will be a few. Also, we do a lot through paypal, and we always make sure the "hooligans" get properly documented with paypal so they don't repeat the same thing with others.
    It is okay to contact me! I have been developing software since 1999, creating many popular products like phpLD.
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  • Profile picture of the author battleweb
    One thing that you may want to consider doing is revising your TOS. I know how brutal chargebacks can be and there are people out there who will order your product and claim they never received it and do a chargeback. They basically commit a felony (ie. Grand Theft) and they are sheltered by the credit card companies and no law enforcement agency is going to want to investigate them without some solid proof that a crime has been committed which can be impossible to provide. What I have done in the past is revised my TOS and stated that any time a customer does not receive their item(s) they must contact me and if they don't and just run and do a chargeback, they will be hit with a large service fee (yes, this is doable without violating CC processors TOS, if worded and done correctly), put them into collections and may be sued for damages or loss at their expense. Now keep in mind, that I've never done any of those and really don't plan on doing it, but the customer does not know that and it acts as a deterrent and if a customer does do a charge back, I now have direct leverage with the customer and the ability to negotiate or reason with the customer and potentially recoop some of my losses, versus not having those TOS or any leverage at all which isn't a very effective at all.
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  • Profile picture of the author Silas Hart
    Its pretty hard to find for eCommerce merchants, but thats because there is actually a high rate of stolen CC purchases online.

    The only thing I can really do is try to prevent it by making sure the customers IP address geographically matches their address, and by only shipping to the address tied to the customers credit card. I verify the identity of SOME purchases of over $100.00 USD by calling the person and by asking them questions I find in public records to see if it matches. Sometimes you can call people and get this gut feeling they are lying - people who steal credit card information are very afraid of being caught and make it pretty obvious. I've nabbed a few. I always copy and paste their e-mail address into Facebook too. I get pretty nervous when a profile tied to the email address doesn't pop up, but I'm even more suspicious if a name doesn't pop up at all - or at least not to the general geo area of the customer.

    Also, a tracking number doesn't verify anything and won't help. I know, its a bit stupid as I believe that if you have a tracking number that shows you shipped an item to a specific address that matches the credit card holders address, then that should be enough proof to at least make it so you don't have to refund the money, but the credit card companies, USPS, and PayPal do not see if this way.
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  • Profile picture of the author malia
    I've nabbed a few. I always copy and paste their e-mail address into Facebook too.
    Would you believe I've googled a few and found their arrest records on the first page of Google? Mugshots and all!
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  • Profile picture of the author candycandy7
    This sucks. I never even thought about chargebacks before now. However, this is a great thread. Very informative and making me think about something I never would have realized until after the fact. Thank you for posting.
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  • Profile picture of the author rodsav
    Keep good records for all your transactions. The more information you can provide for chargebacks the better. There are some legislators trying to change the laws to help merchant account holders and hopefully this will pass. I use Echo sign - software to get a signature for every sale and also have on my invoice about restocking fees and etc.
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    • Profile picture of the author cyberma
      Guys, thank you very much for great tips. I am quite new to ecommerce business and this will really help. Just to summarize a few of the tips

      -google the name & email address
      -check FB/linked profile
      -check IP and the geo location
      -for higher orders call the client
      -ship only to the address that matches the CC

      Business development, consulting, marketing/SEO audits and analysis. visit

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  • Profile picture of the author wizzlesticks
    This is a somewhat crude way of resolving chargebacks if you fail to win them with the credit card issuer (or PayPal): Anonymously register the personal details of the fraudster onto a name and shame website.
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    • Profile picture of the author ScooterDaMan
      There used to be a great website - I think it was called - where you could report these people. They had a whole database that you could load into your shopping cart that was continually updated that would check against those names/ip addresses/addresses. It was totally free for merchants to join and they made their money by charging the end-customer fees to have their names removed AFTER settling with the merchant.

      They disappeared; though, likely they were sued, which is what will happen with the above mentioned website, I'm sure. Too bad; though, I used to threaten people with it from time to time and they almost always backed down. I actually had in my TOS that customers who initiated chargebacks without contacting us first would be reported to (NOBODY ever reads the TOS when they are buying).

      One thing I would point out here is that almost NEVER does the person who has stolen a credit card put their real phone number on an order. More than 9 out of 10 times if you call the phone number a fraudster has provided, it is a fake one. So, when in doubt, call and say you are doing a quality control survey to see how they liked their shopping experience and ask if they have any suggestions for improving the website. If it is a legit order, you'll know. If it is not, you probably won't get the person who ordered the item(s) anyway (if the number rings and is answered at all).

      The other thing that I would mention is that fraud tends to be pretty niche-specific. I have had websites where there never has been an attempt at fraud and others where I had to constantly be wary of it. If it is something that teens buy, it has a much higher chance of being a fraud niche. If it something that you can see being sold out of the back of a van, likewise. Small electronics and jewelry come immediately to mind.
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  • Profile picture of the author JessicaLee
    I think one of the biggest things to remember is preventing a chargeback is easier than fighting it - however neither is really easy!

    A lot of you are mentioning good tips like googling the customer, calling to verify the order, checking IP address and address. But there are other little things to note too. Check Visa's website. They have a 12 point list for detecting potentially fraudulent activity. Also, make sure you are taking advantage of as many anti-fraud tools as possible - like CVV2, Verified by Visa, and whatever the MasterCard tool is. Also, your processor has tools like a whitelist and blacklist.

    You should also remember that, while less common, chargebacks can result from faulty customer service too. Addressing issues like accurate product descriptions, providing contact information, etc. is also important.
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