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How Do I Prevent a Chargeback?

by maxrezn
13 replies
I took on an SEO/Video Marketing client about 2 months ago for about $800 per month for SEO and some video marketing. After the first month they decided to cancel the $800 SEO service but continue with the video marketing. I only charged their credit card once for $800 to begin the campaign and that was over the phone.

I just received a call saying that they want to call the credit card company and say they didn't authorize the charge to get their money back since they haven't seen any results. Very difficult to rationalize with this customer.

What can I do in the event that they claim an unauthorized charge?
#chargeback #prevent
  • Profile picture of the author gregdavidson727
    Originally Posted by maxrezn View Post

    I took on an SEO/Video Marketing client about 2 months ago for about $800 per month for SEO and some video marketing. After the first month they decided to cancel the $800 SEO service but continue with the video marketing. I only charged their credit card once for $800 to begin the campaign and that was over the phone.

    I just received a call saying that they want to call the credit card company and say they didn't authorize the charge to get their money back since they haven't seen any results. Very difficult to rationalize with this customer.

    What can I do in the event that they claim an unauthorized charge?
    If you're selling a physical product you can match the shipping address with the address filed with the debit/credit card. You can also require the customer to send you a scanned copy of their ID. You may even be able to get somebody to sign a form agreeing to the purchase. Getting your customer to sign something is probably the only way to challenge a chargeback for a digital product or service.
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  • Profile picture of the author abbot
    Banned
    Originally Posted by maxrezn View Post

    I took on an SEO/Video Marketing client about 2 months ago for about $800 per month for SEO and some video marketing. After the first month they decided to cancel the $800 SEO service but continue with the video marketing. I only charged their credit card once for $800 to begin the campaign and that was over the phone.

    I just received a call saying that they want to call the credit card company and say they didn't authorize the charge to get their money back since they haven't seen any results. Very difficult to rationalize with this customer.

    What can I do in the event that they claim an unauthorized charge?
    You should always have them fill out an authorization form. Because quite honestly...there is not much you can do unless you have their signature. It IS technically unauthorized and it is technically illegal if you don't have them authorize the transaction.
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    • Profile picture of the author ewenmack
      Sent a PM.

      Best,
      Ewen
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    • Profile picture of the author Claude Whitacre
      Originally Posted by abbot View Post

      You should always have them fill out an authorization form. Because quite honestly...there is not much you can do unless you have their signature. It IS technically unauthorized and it is technically illegal if you don't have them authorize the transaction.
      Yup. If you do not have a receipt from the credit card charge...with their signature..the charge is unauthorized.

      That is why my initial charge is usually paid by check. I ask for a check.

      I doubt you can do anything about it but appeal to your client's better nature.

      Or do what I've done, and tell them about what happens when their videos disappear. Dead links, customers thinking they went out of business.

      Really. Explain it like you are just trying to help them out by not ruining their online profiles.

      I've saved a couple back-charges that way.
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    • Profile picture of the author TyBrown
      Originally Posted by abbot View Post

      You should always have them fill out an authorization form. Because quite honestly...there is not much you can do unless you have their signature. It IS technically unauthorized and it is technically illegal if you don't have them authorize the transaction.
      Are you sure about that? People buy stuff over the phone all the time. I'm not saying you're wrong, just asking if everyone is doing illegal stuff?
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  • Profile picture of the author BrianCampbelldotcom
    Unfortunately anyone who isn't happy can call the credit card company and ask for a refund. About 10 years ago I hired a few incompetent customer support people and a bunch of customers had a bad experience. I got too many chargebacks and was temporarily banned from processing credit cards. It was a PAINFUL experience.

    Here's what I learned...

    Treat your customers like GOLD. If they ever ask for a refund, give it to them immediately. Also, always have a way for them to contact you. If they don't know where to ask for a refund, they will likely call the credit card company. It looks very bad for you when this happens.

    The merchant understands that a few people will call them from time to time. They'll allow a small percentage of chargebacks & it won't hurt you. However, if you have an abnormally high chargeback rate you'll get in trouble.

    I've provided these tips to help because it's where I learned that I needed great customer support and to make sure people had a way to ask me for a refund. If people know that they can ask you questions, they'll ask you for a refund when they want one. When they ask you can also take that as an opportunity to try & resolve the problem (and potentially make them decide not to get a refund).

    I'm not saying that you're not already doing this, but this is where I've put the focus and I haven't had any problems in years.

    You'll always get a few people who will lie to try to get a refund & get your product for free. Unfortunately, that's unavoidable in this business...Most people are honest, if you treat them right you'll be ok long term
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  • Profile picture of the author Aaron Doud
    What would I do personally?

    I would refund them back everything they paid me. I would tell them I will no longer be working for them and wish them the best of luck.

    The warning signs are there that this customer will not work things out rationally. They cancelled one service quickly (buyer's remorse) and now threatened a chargeback (dishonesty & blackmail).

    There are thousands of honest business owners and managers out there you can work with. You are (or at least should be) better than this.

    Don't get into an arguement. Just part company and take this as a lesson learned.
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  • Profile picture of the author flnz400
    Be honest with them... "hey, I don't want to deal with a chargeback. Let me give you a check over the phone right now, text message you front and back check images for immediate deposit, or give you my CC over the phone right now and add on the 3%."

    Do video marketing for someone else.
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  • Profile picture of the author vndnbrgj
    Immediate refund.

    Then, just tell them you are sorry they feel that way.
    You will issue their refund, and remove everything you had done up to that point and move them over to (competitor's name). You wish them nothing but the best.

    Now, you can re-direct links depending on how you backlinked it.
    I own all my backlinking properties.
    In 2 hours I can have all the links pointing to something else.
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  • Profile picture of the author iAmNameLess
    I don't believe in refunds and I don't think you should give in. You can fight the chargeback but it depends on who you used to process the payment to determine if you really have a chance to win. I hope you have documentation.

    I used to use "credit card authorization" forms for people to fill out when I would process, and even then it doesn't always work.

    See, when I first started out, I never was able to refund, because I didn't have money to refund. Now, I don't refund because I don't work for free...

    So to answer your question... the only way to prevent a chargeback is exceptional customer service, great results, and even then it isn't always preventable. You can prevent chargebacks by giving refunds, or prevent them by not accepting credit cards. That's the only way.
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    • Profile picture of the author Voasi
      Originally Posted by iAmNameLess View Post

      I don't believe in refunds and I don't think you should give in. You can fight the chargeback but it depends on who you used to process the payment to determine if you really have a chance to win. I hope you have documentation.
      I don't believe in chargebacks either, especially if you've documented the service you're going (Basecamp!), but if you're going to accept credit cards and you don't want the merchant processor to put a 180-day hold on your account, then offering a refund is to your best interest. Last thing is you want to have $10's of thousands of dollars locked up - I've had this happen to me before.

      This is also the man reason I taught a bunch on here about creating your OWN check process so you don't have to deal with credit cards. It's much better to create a check and cash it yourself - they don't every "chargeback" on that. But then can still claim it fraudulent, but it's not as an easy process as calling up your credit card provider. They make it TOO easy.

      Originally Posted by maxrezn

      I took on an SEO/Video Marketing client about 2 months ago for about $800 per month for SEO and some video marketing. After the first month they decided to cancel the $800 SEO service but continue with the video marketing. I only charged their credit card once for $800 to begin the campaign and that was over the phone.

      I just received a call saying that they want to call the credit card company and say they didn't authorize the charge to get their money back since they haven't seen any results. Very difficult to rationalize with this customer.

      What can I do in the event that they claim an unauthorized charge?
      If you don't have anything they signed, you're not going to win period. If you don't have a record of what you've done for the client and can PROVE it, you've got a 40/60% chance of winning.

      When I was processing CC's, we NEVER lost. Not one chargeback was lost. We had they client authorize the charges via the contract they signed. We also backed up our work by showing everything we'd done inside Basecamp (project management). We would fax these 20-page documents proving that WE HAD DONE OUR PART and the client is trying to NOT PAY FOR SERVICES! We always won because our chargeback documents we sent back were "air-tight".

      In the future, take check info. Here's a line I still use:

      "For credit cards, we charge an additional $200/mo. to process credit cards, as internet marketing is now HIGH RISK for merchant account and they charge us HUGE percentages to process credit cards."

      (this is actually true)

      That way you can get them to fill out your form for checking information.
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  • Profile picture of the author pmarketing
    Turn them over to the collection agency. Small claim court will help as well.
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  • Profile picture of the author TyBrown
    I personally don't understand all the comments on here essentially saying 'oh, just chalk it up as a loss and give them their money back.' It doesn't make sense to me that you would do the work and then when someone is a pain in the butt you just give up without a fight.

    If they do dispute it you'll get a letter in the mail from the credit card company allowing you to tell your side and why you aren't going to refund them the money. Fax them back a detailed list of everything you did for the client, any email trails talking about the work showing any implied consent, etc. I mean, you've got 15 minutes to lose in trying to keep the money or you can just give up. Personally, I'd risk my 15 minutes and hopefully get a deadbeat to pay up.
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