Procedure for Subscription Rebill Charge Backs

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peteg00

New member
Jun 26, 2009
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Los Angeles
So here is my gripe.

I have a trial offer - $1.99 / with fine print and TC's telling the user they will be billed monthly if they do not cancel.

I honor all cancellation and refunds and talk to every customer. It is a valid offer - they get a real product and its not a digital get rich quick.

Its similar to video professor


My issue is with the merchant charge backs. I have my standard template that send overs the terms and conditions / and my rebuttal. I win them 80% of the time.

The other 20% I get ... customer claims to have "canceled this service" or
"invalid transaction"

I have sent over confirmation from usps that the packages were delivered and still was hit with the charge back.

The merchant has no advice what so ever.. every website is telling me things I already know.

Does anyone have suggestions on the documents I need to keep , or anything else that can save me on these charge backs?



boobs :)




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I do not have personal experience with this, but it sounds like you are doing all you can. Working with credit companies sucks. The 20% you lose is probably to people who pay their bills and have pretty good limits. You might just have to eat the 20% and consider it the cost of doing business.

The only real way to eliminate chargebacks is to stop accepting credit cards.

I know a guy who sells cars from his dealership online and he only accepts cash or money order. Obviously this solution doesn't make sense for your product's price level.

If they claim to have tried to cancel and you can prove they did not then I'm sure that would help. I'm not exactly sure how to handle that bit, but I'm reminded of email optout tracking for canspam.
 
If your concern is chargeback % then profile customers and figure out which are most likely to call CC company for a reversal based on what they say on the phone, in emails, etc. After figuring out recurring trends, advice phone reps and emailers to be more lenient on these customers with refunds.

If youre merchant isnt helping you out, maybe look for a change...a lot of high risk merchants advertise themselves by putting forth the fact that they offer a large variety of chargeback reduction services.
 
Honestly from what I know there isn't much you can do. If you have the whole backup etc. One thing you could consider trying is asking your bank what they want said on the phone ie. what questions asked, did you recieve the product etc. Then record the call and and send a transcript of the call with the chargeback dispute. And let them know a recorded audio version is available upon request. Not sure if this would help but honestly in the rebill space those 20% losses are pretty common.
 
Actually the fact that you win 80% is REAL good. You should know that AMEX sides with the vendor for the most part while Visa/MC with the customer. As far as the latter is concerned they're really fucking anal.

If you're shipping physical products you'll need proof of delivery but even then... it's not a bulletproof solution as you already know.

Consider it a cost of doing business, although I can definitely sympathize... red/orange envelopes in my mailbox ALWAYS get my blood boiling!
 
Work with a different bank/mechant account provider/iso/msp. Some are more experienced in fighting chargebacks or certain sorts, especially when dealing with rebilling, negative option billing, and card not present transactions.

Are the cards that you're losing the chargebacks to verifying out with AVS on the initial transaction, and do they have an IP address geo-location match? Transactions may be fraudulent, especially if you have affiliates promoting the product.
 
Drop Amex as a CC processor, if its only a 1.99 offer you don't need their higher average ticket customers, and Amex is brutal about granting chargebacks against the merchant even if you provide all delivery confirmation numbers and proof they ask for. Visa/MC tend to go the merchant's way more often, solong as you have a delivery confirmation number to prove that the customer did receive it. Collecting CVV2 codes will also give you a stronger case against chargebacks as well, particulary with Mastercard banks.
 
johu said:
Work with a different bank/mechant account provider/iso/msp. Some are more experienced in fighting chargebacks or certain sorts, especially when dealing with rebilling, negative option billing, and card not present transactions.
Click to expand...

Any suggestions there? Google turns up too much crap.
 
megatabbers said:
Actually the fact that you win 80% is REAL good. You should know that AMEX sides with the vendor for the most part while Visa/MC with the customer. As far as the latter is concerned they're really fucking anal.

If you're shipping physical products you'll need proof of delivery but even then... it's not a bulletproof solution as you already know.

Consider it a cost of doing business, although I can definitely sympathize... red/orange envelopes in my mailbox ALWAYS get my blood boiling!
Click to expand...

You got that backwards, AMEX is huge into siding with the customer, more so than visa/MC. And don't even bother with discover, they'll ass rape you every chance they get.

I had a company and we recorded every sale that was made (audio) and we would send the wav file over to the bank to fight the chargebacks, we still lost most of them.
 
Your doing really well at 80% success rate to be honest.

The credit card charge back 'system' sucks for anyone running a business. The chargeback 'fee' system actually encourages card fraud. Here in the UK you have to report this crime to the banks who then report to the police.

Given they profit from the fee and bare no risk themselves its in no interest for banks to deal with it.

Moral of story - the shadiest rebill offer is saintly next to what banks pull - fill your boots

/rant
 
FlatLine said:
You got that backwards, AMEX is huge into siding with the customer, more so than visa/MC. And don't even bother with discover, they'll ass rape you every chance they get.
Click to expand...

That's really odd you say that. I have never lost an Amex chargeback... and almost never won a Visa/MC chargeback. In fact, Amex is kind enough to send a letter that starts off with, "Our mutual customer does not recognize the trasaction..." No such luck w/ Visa/MC.
 
There are companies that can buffer your charge backs - not sure how many transactions that you do but companies like Verifi.com may be able to help. They are not cheap though, because they make a lot of cash. I think they were started by a bunch of x-Visa and MC exec's and know how to dilute your chargebacks.

We have never worked with them, but know others that have.

Good luck.
 
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