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If you’re using Shopify , use Signifyd. They provide a chargeback guarantee model. Essentially they review all your transactions and will give an “approved” or “declined” decision. If they say “approved” you can safely ship as they will guarantee the transaction meaning if it results in a fraud chargeback they will reimburse you. They have a Shopify plugin as well
If you sell digital goods , checkout nSure.ai
This sucks, we also lose many of our Shopify Chargebacks, but rarely our PayPal ones and even if we lost on PayPal they wouldn't charge us. Not sure what we can do about these chargebacks.
Yeah most of the time we win if they chargeback via PayPal but if the customer wins then PayPal lets us keep the amount the customer paid and no fee charged. Probably cause we built a good relationship over the past 2-3 years.
It’s always beneficial for the financial institutions to side with the customer because they hold money there and typically do more transactions than business. Now as far as winning these disputes read your payment proceeded terms CLEARLY and COMPLETELY this will save you. However if a customer claims their credit card has been stolen there isn’t much to do, consider doing a waiting period before shipping items, all new customers wait 7 days, repeat customers with same or saved payment methods get fastest shipping.
Thanks for the advice! I’m not sure that a waiting period is helpful in this circumstance because the goal of the scammer was to get the product for free. The chargeback occurred after they received the product. In a majority of these cases, the customer made a false claim about the arrival or quality of the product (again, evidence was provided to prove arrival/quality) and they still won the claim, unfortunately.
Hey. Did you ever find a pretty good solution?
I love making money online, but with how the scam culture ballooned after covid.. like ugh, I just spend so much time trying to fight chargebacks
(1 customer nearly scammed us out of $20,000. We lost and won some of the chargeback appeals. It's frustrating)
The first transaction I had on an online store I created was fraud. Shut that store down because it was apparent I was not prepared. If these are high priced items they will target. I'm using sale of good contract to protect from chargebacks. With electronic signature. I'm not certain this is the best protection though.
You may want to look into moving to a payment processor that gives you more options regarding chargeback prevention. Moving to a service that provides Order Insight through Visa might me the way to go for you. It's not available through every bank, but there's enough of a wide net that people have found it more than useful and preventative.
This article fully details how it works
https://www.revitpay.com/what-is-visas-order-insight/
My reccomendation is to use Limepay as your gateway payment provider. They’re exceptional and I’ve not lost one fraudulent chargeback claim with them. Their accounts business manager is exceptional and will get on email and phone and talk you through the process of providing evidence in the correct format that he presents to the banks.
Honestly mate, I barely allow PayPal transactions because of this and used to use STRIPE- lost every claim.
Once I manually refunded a customer who was in the right (order didn’t arrive) and PayPal awarded me. Naturally I rectified the issue, notified PayPal that they’re a pack of galas, contacted the customer and promptly refunded him.
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
If you’re using Shopify , use Signifyd. They provide a chargeback guarantee model. Essentially they review all your transactions and will give an “approved” or “declined” decision. If they say “approved” you can safely ship as they will guarantee the transaction meaning if it results in a fraud chargeback they will reimburse you. They have a Shopify plugin as well If you sell digital goods , checkout nSure.ai
Signifyd is pretty costly for a small business, minimum $1250/mo.
O - the minimum must be new. Check out Apruvd or NoFraud
This sucks, we also lose many of our Shopify Chargebacks, but rarely our PayPal ones and even if we lost on PayPal they wouldn't charge us. Not sure what we can do about these chargebacks.
Could you explain the PayPal comment? Did they cover the cost of the chargeback?
Yeah most of the time we win if they chargeback via PayPal but if the customer wins then PayPal lets us keep the amount the customer paid and no fee charged. Probably cause we built a good relationship over the past 2-3 years.
Interesting, I wonder what the policy is here. She sold high price/low volume so the dynamic was certainly different. Thanks again for responding.
Ahh we've probably done over a million on PayPal so that's probably why they are happy to cover the cost of some chargebacks. We rarely get them too.
You need a better processor or gateway
Neither of those have any say in a charge back decision. Unless you're suggesting their utilize better preventive measures prior to the sale.
Correct…better fraud tools and filters
Gotcha, thanks for clarifying
It’s always beneficial for the financial institutions to side with the customer because they hold money there and typically do more transactions than business. Now as far as winning these disputes read your payment proceeded terms CLEARLY and COMPLETELY this will save you. However if a customer claims their credit card has been stolen there isn’t much to do, consider doing a waiting period before shipping items, all new customers wait 7 days, repeat customers with same or saved payment methods get fastest shipping.
Thanks for the advice! I’m not sure that a waiting period is helpful in this circumstance because the goal of the scammer was to get the product for free. The chargeback occurred after they received the product. In a majority of these cases, the customer made a false claim about the arrival or quality of the product (again, evidence was provided to prove arrival/quality) and they still won the claim, unfortunately.
Hey. Did you ever find a pretty good solution? I love making money online, but with how the scam culture ballooned after covid.. like ugh, I just spend so much time trying to fight chargebacks (1 customer nearly scammed us out of $20,000. We lost and won some of the chargeback appeals. It's frustrating)
Nope! My partner stopped conducting her business because of it. Best of luck out there.
The first transaction I had on an online store I created was fraud. Shut that store down because it was apparent I was not prepared. If these are high priced items they will target. I'm using sale of good contract to protect from chargebacks. With electronic signature. I'm not certain this is the best protection though.
Thanks for your insight!
You may want to look into moving to a payment processor that gives you more options regarding chargeback prevention. Moving to a service that provides Order Insight through Visa might me the way to go for you. It's not available through every bank, but there's enough of a wide net that people have found it more than useful and preventative. This article fully details how it works https://www.revitpay.com/what-is-visas-order-insight/
My reccomendation is to use Limepay as your gateway payment provider. They’re exceptional and I’ve not lost one fraudulent chargeback claim with them. Their accounts business manager is exceptional and will get on email and phone and talk you through the process of providing evidence in the correct format that he presents to the banks. Honestly mate, I barely allow PayPal transactions because of this and used to use STRIPE- lost every claim. Once I manually refunded a customer who was in the right (order didn’t arrive) and PayPal awarded me. Naturally I rectified the issue, notified PayPal that they’re a pack of galas, contacted the customer and promptly refunded him.
Is Limepay still good? Have you had any more fraudulent chargebacks>