If you run a business that sells products or services online, you’re likely familiar with the term “chargeback.” Chargebacks happen when a customer contacts their credit card issuer and disputes a charge on their statement.
The card issuer then initiates a refund for the customer and reversal of the transaction for the merchant.
There are a few different reasons why a customer might initiate a chargeback. Maybe they didn’t receive the product they ordered, or they were dissatisfied with the quality of the product.
In some cases, chargebacks are initiated fraudulently, in an attempt to get something for free.
Regardless of the reason for the chargeback, it can be a costly and time-consuming process for the merchant. Not only do you have to refund the customer, but you also lose the product (if applicable) and may incur additional fees from your payment processor.
If you’re selling products or services online, it’s important to be aware of chargebacks and how to deal with them. In this article, we’ll discuss everything you need to know about chargebacks, including how to prevent them and what to do if you receive one.
Shopify has been accused of not doing enough to prevent chargebacks, and of not adequately protecting sellers from them. There have also been complaints that the company does not provide adequate support to sellers who do experience chargebacks. If you are considering using Shopify, be sure to research the company thoroughly and understand the risks involved before making a decision.
What is a Chargeback?
A chargeback is when a customer contacts their credit card issuer and disputes a charge on their statement. The card issuer then initiates a refund for the customer and reversal of the transaction for the merchant.
There are a few different reasons why a customer might initiate a chargeback. In some cases, chargebacks are initiated fraudulently, in an attempt to get something for free.
How Does Shopify Deal With Chargebacks?
Prevention is key
The best way to deal with chargebacks is to prevent them from happening in the first place. There are a few things you can do to reduce your risk of chargebacks:
- Offer excellent customer service. If your customers are happy with your products and service, they’re less likely to initiate a chargeback. Respond quickly to any questions or concerns your customers have.
- Use clear and concise language in your marketing materials. Don’t make promises you can’t keep or use misleading language in your advertising.
This could lead to customers feeling like they were misled and result in a chargeback.
What to do if you receive a chargeback
If you receive a chargeback, don’t panic! There are a few things you can do:
- Respond quickly. The sooner you respond to a chargeback, the better. Many credit card issuers give merchants 10 days or less to respond.
- Gather evidence. Once you’ve received notice of a chargeback, start gathering evidence right away. This could include order confirmations, shipping records, emails between you and the customer, etc.
>What if I’m unable to prevent or dispute a chargeback?
If you’re unable to prevent or dispute a chargeback, you may be liable for additional fees from your payment processor. These fees can range from $20-$100 per transaction.
Chargebacks can be costly and time-consuming for merchants. However, by taking steps to prevent them and responding quickly if one does occur, you can minimize the impact on your business.
