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Afraid of chargebacks

Discussion in 'Social Networking Sites' started by erickishere, May 3, 2013.

  1. erickishere

    erickishere Elite Member

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    I recently got my friends into internet marketing and they're down to own a small business together with us bestfriends in it. Soon they'll arrive and sign up on BHW. Anywho! We've decided to get into social media, like selling followers yada yada but there is one thing we're afraid of at the moment and its chargebacks. I personally have read stories here on BHW about chargebacks especially considering it is a virtual good and since paypal always side with the customers and instead of us sellers, the person charging the chargeback aka customers always win.

    To sum it up here is the question.

    What can we do to avoid chargebacks disputes and all of that?
     
  2. back2form

    back2form Jr. VIP Jr. VIP Premium Member

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    Avoid using Paypal.. that's the only way to win over
    charge back :)
     
  3. Furious George

    Furious George Supreme Member Premium Member

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    Avoiding chargebacks is not something anyone can do. You can minimize them and take steps to protect yourself, but realistically when you get on the wrong end of a dispute there is little you can do.

    If the card is stolen, you're fucked.
    If the customer says "item not as described", you're fucked.

    The only way to prevent charge backs 100% of the time is to accept a payment method that you can't chargeback, like bitcoin, liberty reserve, western union, money gram, bank wire, bank deposit, cashiers check, money order, and cash. (off the top of my head)

    Of course, doing that will limit your sales because people want the security and ease of paying with a credit card. Accept credit cards, just make sure you have a very good credit card agreement, capture a signature, make sure the address matches 100% including street name, number, and zip code, and get an exact match on the name of the card. Make sure the services you provide (or products) are clearly outlined and make the customer agree to those terms digitally. You can even go as far as to use a service like docu sign to have them agree to a contract.

    Even if you lose a chargeback, that doesn't mean funds can't be recovered through other methods, such as collections or through the courts.

    A good credit card processor helps as well... but with chargebacks, often times you're just screwed. It doesn't happen that much, but when it does, it sucks. I love stripe. It's easy, and they charge a small fee for chargebacks. You can program your own checkout system.... it's wonderful.


    P.S. Good luck. Starting a business with friends is the quickest way to make new friends... if you catch my drift.
     
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  4. kvmcable

    kvmcable Supreme Member

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    If you do everything right calculate about 2% loss to fraud. It's part of doing business. Now if you're being foolish and accepting all payments without DD then expect that number to be much higher. We reject about 5% of payments made to us online because they don't pass our DD checks.
     
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  5. zoomsixx

    zoomsixx Senior Member Premium Member

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    Manually screen orders. Learn what to look for concerning fraud. I look at names, addressses, IP addresses. I scan for anything out of place. If anything looks weird I ask the customer to call. 99% of the time someone trying to rip you off will not call.
     
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  6. DopeyDuke

    DopeyDuke Junior Member

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    Furius George gets my vote for an advice that actually helps start up businesses.

    Chargebacks, like bad debt, is and will always be a part of an online business. It doesn't matter if you go with paypal, plimus, digital river avangate or what not, there will always be customers who will ask for their money back or file a claim with their credit card company.

    Accept the fact and deal with it.I have no idea what you will be sellingbut what you can do is to protect yourself.If you're selling a software, then develop a license algorithm that you can disable if someone does a refund or charge back. If you're selling followers, then make sure that you note that in case of chargebacks, you will "undo" your work or unfollow those orders, etc etc.

    Good luck!
     
  7. rasmusk

    rasmusk Senior Member

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    The problem about online services like selling likes is, you will experience alot of fraud.

    I would only accept paypal to be fair. Because some creditcard agreements have super high fees if you get a chargeback, and you will.
     
  8. divyux

    divyux Registered Member

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    Mate its simple Just few things you need to keep into mind to avoid chargebacks!
    1. Always deliver Quality work than Quantity work!
    2. Prefer to receive payments as Services or Gifts.
    3. Always keep yourself logs or proof of every convo with every buyer that buys from you! ie. Screenshots,Starts point,End Point of orders,etc.
    4. If you receive any dispute do not hesitate or lose calmness just be cool and upload your Screenshots and try to stick to the point that you provided Virtual Service and work has been done as stated!

    These are some things according to me that can help you in avoiding chargebacks... Rest its upon your Luck or your fate :)

    Its not always necessary to be Techie sometimes being Tricky will do the trick ;)
     
  9. Techxan

    Techxan Elite Member

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    Heed this.

    Make damn sure you get everyone's responsibilities written down, your frieds, since they are your friends, will think that if they do not do exactly what their duties are, it will be OK since you are friends and you will not mind.

    More than likely, you will regret this decision.
     
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  10. G-S-T

    G-S-T Executive VIP Jr. VIP

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    There is just no way around it these days. The sad thing is that most chargebacks are actually false, they are just cheap ass fuck hole buyers who want something for free. I take it up the arse off these pricks every day, the average daily chargeback loss for my whole operation is around $300. I get people doing chargebacks for $9.99 and I think to myself... How could it possibly even be worth the time and effort to do a chargeback for $9.99, surely it would cost more than that to call the bank? Or cost more in time and effort to go to the bank. Either way, these idiots boil my blood.

    Somebody please make a website called nameandshamepaypalchargebackbuyers.com - On this site should be a detailed account of how a user has committed fraud by filling a false chargeback. Then create individual static pages for each submitted asshole, on those pages would be all their personal info at the top, then an account from the seller of how they committed the fraud, then some excerpts of the law and finally the contact information for the police in their local area.

    Then when the buyer files a false chargeback, the seller can go to that site and publish all the info, then send the buyer a link to it and see it they want to change their mind. Without blackmailing them, you could mention that the site has a policy of removing disputes that where resolved amicably.

    I think that would work in a lot of cases.

    I would glady publish all the personal information of these buyers who think they can get away with fraud transactions.

    I would think its in the best interest of the card issuers that these people be pointed out, after all, they are committing fraud themselves.
     
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  11. social1

    social1 Senior Member

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    HOLY COW, $300 a day in chargeback loss! I knew you were a legend, but damn you are killing it if that's your chargeback loss daily! Rep+ given for the nameandshamepaypalchargebackbuyers.com idea I think its great and its available! :p
     
  12. netmoney1

    netmoney1 Executive VIP

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    Put this in your service agreement:

    Client permanently and irrevocably waives any and all right to enact a ?chargeback?

    against these payments for any reason whatsoever against XXXXXXX

    Not sure if it would work for paypal...but for a merchant account it is solid. Never had one go through with this in the agreement.
     
  13. G-S-T

    G-S-T Executive VIP Jr. VIP

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    It wont work for paypal bro :/
     
  14. mickyfu

    mickyfu Jr. VIP Jr. VIP Premium Member

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    Here is a fact, no matter what you do, at one point eBay and Paypal will shit on you.
     
  15. Panther28

    Panther28 Elite Member

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    Always leave some money in your paypal, to cover the % off chargebacks you expect, so you don't get any shit happening to your account, if you have a zero balance in there, as you increase your business, increase the % you leave. Yes you might have a problem that means you lose that, but likely you wont.

    However, make sure your linked bank account (direct debit) has the money moved from there to a non paypal account, so if you have a mega problem, they cant start snatching stuff via the dd. They won't try to charge your cards though, as its illegal without your permission, but the DD is already a pre agreed permission.
     
  16. Typlo

    Typlo Jr. VIP Jr. VIP Premium Member

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    One thing I haven't seen mentioned, use a shopping cart that has fraud filters or add a service like Maxmind to it, which filters for fraud better than Paypal or 2checkout do. It will drop your chargeback rate.
     
  17. G-S-T

    G-S-T Executive VIP Jr. VIP

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    Maxmind is awesome, i cant fault it for what it does. But it does not filter out the average Joe cheapskate buyer. Those are the ones that do the most damage.
     
  18. Typlo

    Typlo Jr. VIP Jr. VIP Premium Member

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    We actually haven't had a chargeback on the site we are currently using it on, but that is definitely true too. It won't stop the cheapskates.
     
  19. G-S-T

    G-S-T Executive VIP Jr. VIP

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    Its deffo a niche thing bro. I assume your using it on maxvisits? Your clients and mostly marketers who tend to have a bit of Paypal etiquette, or at the very least they could possibly get their site "fucked with" if they tried to rock to boat.
     
  20. Typlo

    Typlo Jr. VIP Jr. VIP Premium Member

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    It's not on Maxvisits yet. It does get quite a few chargebacks though, be interesting to see which are actually the friendly ones once we get MM on it as well.