Fight chargeback or not?

Somebody from Colombia ordered electronic goos from our on-line store. Total value about U$107.00. We shipped it, they received it and sure enough after about a month there is a chargeback.
We ship everything by Fedex and have all papers and signature of the person to support that recipient did receive goods. So we won first chargeback. Card owner posted second level of chargeback. Since it is Visa it was filed as an Pre-arbitration. That means this time Visa itself will evaluate a case and have final decision who was right and who is wrong. Twist is that this process costs about U$500 (!!) and who loses pays that fee.
We checked again form sent by credit card issuing bank and name of the card holder is completely different than recipient's. Also, they are surprised why are we fighting chargeback when it is reported as fraudulent charge.
From what we know is usually those are two friends who decided to scam merchant, get goods and not pay for it. At this moment we are fighting 2 chargebacks coming from Calgary where 2 people ordered exactly same things in day difference, paid in cent same amount and both of them claiming code 83- fraud, card absent.
Going back to initial issue. We estimated that 107 dollars is not worth a risk to possibly lose another 500 in process so we declined to fight that one. Did we make mistake? Did we have any chance of winning?

 

Sure you have a chance of winning if you have the proof that you have sent the item.
If you can afford some 5000-6000€ just get a lawyer and go to court against Visa. On the end you will win and all costs will be paid by Visa.
If you dont have time to do it, just keep lousing money.
The hacker knows that you wont do nothing and he will keep ordering from you and on the end you should shutdown your business.

 

Just take this as a lesson.
Next time you should make a rules that mentioned the buyer must use their own credit card to make any purchase.
This is to avoid any dispute in the future.

 

You didn't really get the story right.

 

Always fight a chargeback, you should not just give up at least you will show that you think you are right and that sometimes helps your case and overall business cards in the eyes of PayPal or any MAP.

 

Not worth it. Visa arbitration is way harder to win. I'm not sure who told you this but you may want to double check who pays the $500 fee. We've never seen the customer pay the fee even if they lose. It's always the merchant and it's not refundable.

 

Blacklist the customers and move on, not worth your time

 

Crooks won again today! Just received letter from Elavon saying: "Based on rules and regulations governed by card associations and the details of this case we are not able to resolve this case with card holders issuing bank. Your account has been debited for the dispute identified above (215 dollars). If you choose to pursue further attempts to resolve this dispute, you must proceed directly with a card holder."
This is for another case where we were sure 100% that we will win. Have all papers and signature of recipient. No dice.

 

What a hell? So what is a point of arbitration if merchant always pays?

 

In your case it is not worth the hassle. The best way to avoid this in the future is make it mandatory that all accounts match the credit card info such as name, address, etc. I know a ton of companies are now calling and verifying orders placed by new members in order to verify the item was intentionally ordered by the person on the credit card account. Also, if you are in the United States why not limit your customers to US only or US and Canada. Hard to battle someone that is out of our jurisdiction. I had plenty of people attempt to scam me over the years and the key to winning is not letting anything ship out until you are 100% sure it is a legitimate order.

 

Actually, you're right, it is paid by the losing party. I just checked through some of our T&C's and they do assess it against the party who loses arbitration. I think the issuer covers it and doesn't charge their cardholder, but you should theoretically get a refund if you were to win them.

Do you know what the chargeback code was for these? That makes a huge difference in being able to fight it. Realistically, if the card wasn't electronically swiped or chip captured, it makes it extremely difficult to win. I've seen merchant who had a signed and faxed invoice, copy of driver's license, and a shipping delivery confirmation and still lose. Issuers are the party who decides on who wins the chargeback, which is a huge conflict of interest IMO, and they definitely favor their customers over merchants.

Also, if you are certain of the buyer's identity and location you can file a police report where they are located. Friendly fraud is illegal. We've seen this, and even the threat of it, work several times. Really depends if the local police care enough to do anything about it though. Sometime they are all over it, and sometimes they tell you it's a civil matter and they don't care.

 

jestep you said many correct things in your last post. We just got off the phone with Elavon chargeback department. We lost 2 cases this morning and received second chargeback from customer from Germany. So about $550 lost and another $650 coming up.
We had long and hard talk with Elavon and realized that when somebody makes purchase on-line issuing bank is checking does credit card used have enough credit to cover for it. Nothing else! name and address of purchaser can be anybody's. In USA and Canada system suppose to check AVS (address) and match it with cardholder's but that is not 100% either.

Codes we are getting are:
4837-no cardholder's authorization
83-fraud-card absent
28-request for copy bearing signature

Obviously this is all for on-line purchases. Swiped or chip + PIN are hard to dispute by cardholder. But for on-line transactions playing stupid is fine. Why issuing banks endorse crooks is beyond me. We always win first chargeback but second one is different story. Looks like issuing bank automatically protects buyers. They must be ones who invented such a stupid name for fraud calling it a "friendly fraud". Police will not do anything. For them it is not crime worth their effort, even that we can supply name, address, phone numbers of crooks who committed credit card fraud

 

Might want to look into programs like Ethoca or Verfi to help avoid this... and also companies like chargeback.com or chargeback911 to help fight them after the fact. Good luck!

 

Actually we started account with https://www.signifyd.com and were looking into others as well like https://siftscience.com, www.subuno.com, www.riskified.com, www.kount.com. We choose Signifyd because they have chargeback insurance. We'll see how it goes. Hope for the best but now we have to survive present number of chargebacks. Feel cheated and powerless. Banks who issued credit cards don't care about merchants. When charge comes in they approve it if there is enough coverage in credit card without checking anything else.

 

Please keep us posted on the performance of these services! I am very interested.

 

yesterday we got 2 more chargebacks, both from UK, about $500. Those are purchases from May through Elavon. We sent papers back with proofs and all that but now quite sure we'll lose those as well. Crooks will win again

 

IMPORTANT UPDATE:
Started using Signifyd and so far we like it! They provided manual entry form as well where basic purchase info can be entered and checked. So we are doing it now for old orders which we received as chargebacks. System found that 4 orders from UK were placed by 2 persons using 2 different Visa cards probably stolen from cardholder from Taiwan! One crook is Fredy Garjo from Luton, UK and second crook is Irene Warren from London (Edmonton), UK. Irene Warren stole from us U$911.93 and Fredy Garjo stole from us U$199.65!
You have to add to those amounts 4 x Elavon processing fees and they are not small. They really appear to be a just a paper pushers and they are not fighting for us. They just send papers back and forth. We are entering old orders as we speak and wonder what else we will find out. But yes, moving to Signifyd looks like right thing to do.
We are in hardware/software business and we will probably post on one of our sites that we sell complete e-commerce package with that insurance integrated and included!

 

UPDATE:
Since last update we lost another 2000 dollars due to crooks and chargebacks. On good note going with Signifyd was right decision so far. They get copy of every on-line purchase and estimate risk selling to that customer. Within minutes we get rating and insurance. Didn't get any chargeback claims yet. We'll see how it goes.

 

My name is AkshayB and my goal is to really help make people’s lives easier. Particularly if you are a merchant. A lot of you who sell (x product) often end up facing two frustrating problems. 1) You are classified as a “high risk” merchant by your credit card processing company and as a result have to face stringent rules and regulations in order to conduct your business. 2) Due to the nature of what it is that you sell it is common that you face or will often face “chargeback” bs. A chargeback for those who do not know is a concept that entails your credit-card provider asking the merchant to make good on a product that is the subject of a fraudulent or disputed transaction. For example, let’s say a customer for whatever reason (legit or not) decides to dispute a transaction and they do not go through you and goes through the card company, the card company will “charge you back” for the price of the goods if you do not fight the chargeback. I quite frankly am tired of merchants continuously being taken advantage of by card companies and customers. I want to help you guys in any way that I can by providing as much info as I can for any problems you as merchants might be facing as well as point you in the right direction to some tools that can help your business run much better.

 

I have had similar negative experiences on stripe. The only time I won was when the claimant had waited 3 months to reclaim money...I won because of the time limit expiring. I still had to fight for it though.