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Why do merchants hate chargebacks

Phillip has researched over 1,000 payment processors and been quoted in various high-profile publications, like the Los Angeles Time, INC Magazine, The Atlantic, and the Miami Herald amongst others.
Phillip has researched and reviewed over 1,000 merchant services providers during the last 15 years.
He also owns multiple businesses that accept charge card payments.
If you are looking for an ethical credit card processor that doesn’t hide fees or lock you into expensive contracts, see Phillip’s merchant account picks here.

Since 2004, spent some time working to break down the barriers that stand between you and your perfect credit card.
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Digital Chargeback Management—a Better

Some retailers who usually saw a couple of hundred dollars’ worth of chargebacks each year were suddenly seeing thousands’ worth, Shearman says.
Much of that has been due to fraud, but consumer disputes were also being automatically charged to retailers who didn’t yet have chip-card readers, he adds.

If a customer feels like they’ve been lied to or scammed, they won’t hesitate to file a chargeback.
Since people have different preferences, you need to accommodate all of their needs.
Your customer support team must be readily available on multiple platforms to help the consumer.
Give your customers as much options as possible with regards to seeking customer support.

  • Chargebacks certainly are a common method for cardholders to obtain back their money from merchants when they received faulty or wrongly-advertised products, in case of fraudulent charges, or should they simply want a refund.
  • And, as you’ll read about momentarily, when misused, that “weapon” can implode on
  • If a customer feels as though they’ve been lied to or scammed, they won’t hesitate to file a chargeback.
  • what chargebacks are, the chargeback process, and how exactly to dispute transactions effectively, it is possible to manage any chargeback situation, to make sure your business stays safe.
  • Whenever a consumer files credit cards dispute, the business is charged a fee by its processor.

But fight back and you may easily avoid those unnecessary penalties.
Have a look at what happens when you fight chargebacks and everything you miss out on in the event that you don’t.
Until the tide changes, you can find defensive strategies to used in the meantime.

Why Executives Need To Roll Up Their Sleeves And Work ‘in The Trenches’ Of These Companies

It usually is embedded directly onto Scott’s site, and it’ll handle cancellation fees automatically.
PayPal isn’t exactly jumping to re-present on Scott’s behalf, which leaves him to lose the chargeback and pay the fee.
PayPal possesses “seller protection” for chargebacks and the like, but, again, it benefits only sellers of tangible goods.
It’s crucial that merchants deploy the right strategy for the proper problem at the right time.
In the same way you identify chargebacks using the source, you must deploy a source-informed response.

For example, you can’t fight friendly fraud with fraud scoring, because friendly fraud happens after the transaction.
Chargebacks are a concern for just about everyone in the eCommerce space.
Most online businesses will at least see the occasional chargeback, while some merchants are hit so frequently, they’re in immediate threat of losing their card-processing privileges.


Based on the 2021 Chargeback Field Report done by chargeback911, the average merchant noted a 21% increase in friendly fraud between 2018 and 2021—in addition to the 25% chargebacks due to COVID-19.
Proactive and effective customer support can go a long way toward resolving chargebacks or preventing them altogether.
Chargebacks are mostly initiated when customers feel like they are unable to obtain a refund through your customer support department.
On the other hand, this tool can help you manage chargebacks along the entire transaction lifecycle, including charge card, debit card, ATM, POS, and mobile transactions.
Simply put, Accertify is an end-to-end solution that manages the complete chargeback fraud process, from detection, protection, and prevention to management and dispute resolution.

the issuing bank or entity begins.
Accordingly the merchant provides proofs that the transaction stands and the card issuing entity then decides who wins the dispute.
Some businesses don’t do anything about chargebacks because they don’t feel like they are able to.
After all, in case a buyer claims to be always a victim of fraud, calling that each a liar appears like a bad idea.
Based on that, plenty of merchants view chargebacks because they would a tax or perhaps a churn rate, writing off disputes and filing it under cost of goods sold (COGS).
Rest assured your competitors also probably face similar fraudulent chargebacks.
Customers may file such fraudulent chargebacks without realizing how severely their actions affect your organization.

Occasionally, you could incur this chargeback due to a misunderstanding.
Sometimes, a family member could make a purchase using a family credit card and another member of their family might not be aware of that transaction and could file a claim against your business.
Earlier I explained a large percentage of consumers file chargebacks since they think it’s easier than contacting the merchant directly.
In relatively stable economic times, increasing revenue streams is a sensible strategy for growth.
For some time there, non-financial online retailers were increasingly subscribing to embedded banking to complement a streamlined customer experience and boost loyalty.
A customer’s satisfaction with their purchase may be the key to making certain they’ll not pursue a chargeback.
Having an easy return policy and hassle-free