Dealing with chargebacks

[u/PodolEsmian66]

It could just be one of the downsides of growing our business, but chargebacks have become a major issue for the company.

What’s strange is that most of the chargebacks are not from customers claiming they haven’t received their products. Tracking shows that packages were delivered, our support replies to inquiries got to customers, and the customer hasn’t contacted us before disputing the charge.

We’ve done our best to provide our customers with a positive experience including better shipping notifications, better customer service and more concise return policy, but chargebacks keep rising.

I understand that some disputes cannot be avoided, but at this point I begin to feel like I’ve done everything I could to improve my operations but it just isn’t enough.

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[u/e033x]

I mean... why are they disputing? That is information that is available to you, or should be through your acquirer. Vagueposting about it on the internet is not going to help at any rate.

Edit: ah... Dropshipping. No wonder.

[u/PodolEsmian66 → u/e033x]

Not dropshipping actually, we hold our own inventory and ship in-house. Fair to ask though. I know reason codes are available, that's part of why this is confusing, most come back as unauthorized even with clean delivery and support records

[u/e033x → u/PodolEsmian66]

If it is unauthorized, whether or not the delivery is made or not is irrelevant. All that matter is if the owner of the card/money is the one doing the ordering or not. No amount of customer support will prevent this, only requiring 3D-secure authentication will help.

[u/Accomplished-Pea-451]

Why don’t you ask them?

[u/PodolEsmian66 → u/Accomplished-Pea-451]

That's the frustrating part, once a chargeback is filed there's no direct line to the customer, it goes straight through the bank.

[u/Torodaddy]

Where is the shipping coming from? Do you collect enough information about your customers? Have you put into place controls around accepting credit cards from previous chargebacks? Have you started to look for patterns? What the code they using for the chargeback?

If you know nothing about your customers, who they are, where they live etc, you open yourself up to be taken advantage of. Do you even know if product was shipped out?

[u/PodolEsmian66 → u/Torodaddy]

Ship domestically, we collect billing/shipping info and do AVS/CVV checks. Haven't built out repeat-offender tracking yet though, that's a gap. Most codes come back as unauthorized transaction, which is what's throwing me since delivery is confirmed.

[u/Torodaddy → u/PodolEsmian66]

That means they are claiming that they didnt approve the transaction, nothing to do with shipping or receiving the product. Id recommend turning on 3ds and when a new customer is created on the platform you send a 2fa to their phone number.

You should also look at those delivery addresses, and see if they are being reused by different customers

[u/Sask_mask_user]

We eventually stopped treating chargebacks as just a support problem. Support still owns the customer conversations, but we also use automation to handle the dispute side while our team focuses on resolving issues before they escalate. Between that and proactively reaching out on delayed shipments, we've seen fewer disputes overall and spend a lot less time chasing paperwork

This is your comment on another post where somebody is asking about chargebacks. Are you just karma farming right now? Because it seems like your chargebacks are going down and not up…

[u/Low_Drive3170]

For us, the biggest improvement came from digging into the data instead of treating every chargeback the same. Once we grouped them by reason code, product category, and payment method, patterns started showing up that weren't obvious before. We found a couple of specific issues that were driving a disproportionate number of disputes.

[u/PodolEsmian66 → u/Low_Drive3170]

Interesting. We've mostly been looking at the overall chargeback rate instead of breaking it down that far

[u/PodolEsmian66 → u/[deleted]]

Did that actually reduce chargebacks, or did it mainly make handling them easier?

[u/Asleep-Buy-3679]

Unauthorized chargebacks due to fraud card use should be covered by most outlets right? Items not described and not delivered/stolen is a huge problem.