I Hate Chargebacks

I read Adam’s post about a large chargeback a while ago and could completely relate to the pure helplessness felt when dealing with these.

A chargeback is when someone files a claim to get their money back from you. This is a great consumer protection device, but it can be abused.

It’s almost obscenely rare that the merchant will ever win one of these disputes. I’ve tried many times to no avail. I fully understand that this is simply a cost of doing business, but I’d still like to send a message:

As you know I own a business called House Of Rave and over the years we’ve had to deal with chargebacks. Since customer service is good and everyone gets handled properly, legitimate chargebacks are quite rare. However the occasional piece of fraud slips through the system, and it really sucks losing even $1.00 to these people.

I’m not in position to change how this entire system works, but I’d like to do something to help. Whenever I see a suspicious order, I’ll basically just Google the name, address, email etc. to see if I can find results. Based on this I can often make a judgement to send the order or not.

Inspired by Adam’s post, in the archives of the House of Rave Blog I’ve created the Chargeback and Fraud Warning Page:

We don’t get many chargebacks, but I listed two of them we’ve recieved in the last five months. I’ll list more if they come along.

This way if any other merchant Google’s some of this information, it will give them a hint that this person/address has done this before. They can make their own judgement call from there.

If you own a store or have the resources to make one of these pages, I’d suggest you do. I’m not sure if it’s worth it, but if this manages to stop even one jackass from ripping off someone else’s store, I’d be happy.

Blog posted on: September 1, 2009

13 comments on “I Hate Chargebacks

  1. athensoh

    These days I am disputing a 4.5K unjustified chargeback initiated by a customer 4 months later after the purchase! Just submitted 15 pages of explanations. i hate chargebacks too!!

  2. Johnie

    Does this violate any privacy policy you have on the site?

    Are you opening yourself up to a lawsuit?

    I can imagine you can have the same effect and censor some information.

  3. Jason

    This is a good idea. If more merchants, online and offline, did the same thing there would be less fraud. When there is less fraud we are all better off.

  4. Adam McFarland

    Awesome Nev! I'm all for posting every single one of these scumbags info online. We spend a ton of time fighting it constantly. We *almost* were able to stop a delivery last week when we found out the charge was on a stolen card – we were about 15 minutes late.

    It would be interesting if retailers came together to build some sort of searchable database. Even better, if our cart software queried the database and didn't allow previous offenders on other sites to purchase.

    Just thinking about chargebacks gets me all fired up!


  5. Dave

    Amen to this, I've had to deal with a handful myself and it sucks. Cost of business is easy to say when it's small transactions, but things like $4,500 like the above commenter can be detrimental to a small business.

  6. me2press

    Nev I agree with you fully. When I used to sell on eBay I would get many people pulling the charge back scam. They know Paypal will always side with the buyer. As I seller I was out the cost of the item and the money Paypal gave back to the scam artist. If you sell on eBay this is a very common problem. The way the system works Paypal and eBay will always side with the buyer. It's sad that so many fee's are paid and there is not fraud prevention.

  7. Jimmy

    I've been in business on ebay paypal for a year now and just got my first chargeback. I think it's been so long because all my items are under 20 dollars, most under 10. Anyways, this jerk files a fraudulent chargeback on an 8 dollar sale! WTF??
    And I used Paypal shipping so all the proof is right there, tracking number says delivered, recorded as shipped with Paypal. If they side with that guy then there is no hope for this problem, it's like they won't risk pissing off one customer, even the scammers, and would rather just screw their sellers six ways from sunday. Who the hell would file a scam chargeback over 8 bucks?

    1. Ankit

      because that guy probably purchased 1000s of items worth 5-10 dollars within 24 hrs. and reported the card as stolen. So, the issuing bank usually reverses all transactions because customer will not pay and the bank will loose the money.

  8. Dustin

    This is the best idea I have ever heard of. I have not had a chargeback yet, but I have had fraudulent sign ups and hack attempts, and a chargeback is just the next level. I feel your frustration!

    I’m sure there is a larger resource like this one? I’m tempted to Google it now.


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