How Do You Handle Chargebacks?

With my Digital products if I plan to offer a 100% refund policy, I agree that I get much more sales but then again I also get a lot more chargebacks.

And as you all know, you can no longer sell digital products on Ebay using the auction feature. So I would like to know the following:

What percentage of chargebacks is normal to expect?

Would really appreciate your ideas and input

Thanks in advance

Xohaib

 

Around 10% of the total sales would be fine
But more than that is consider there something wrong with your item

 

10% chargeback rate? thats way way high. We process almost exclusively for digital and almost every single client has less than a 0.5% chargeback rate, and ALL of our clients have less than a 1% chargeback rate.

Now if you mean 10% refund rate, that's different. A 100% refund policy should actually decrease your chargeback rate, since people will be more likely come to you first rather than dispute it with their bank.

 

A 10% chargeback rate would suggest there are other problems you need to address.

 

With any business that sells digital goods, you can expect a higher than usual charge back rate.

There are loads of hackers & scammers that use stolen PayPal accounts to purchase these digital goods, then resell for a lower price for their own profit

If the charge back is from a stolen account, it depends on your own morals. You can be an honest guy and understand the situation and not fight it since the rightful owner of the account is just retrieving funds which were unauthorized, or you can fight the charge back and hopefully win the money - chances of this may be low since you are dealing with digital goods.

 

Unfortunately true.

Simple solution to this, don't use Paypal or other processors that have accounts that store financial information attached to them.

 

MoneyBookers is a great alternative, they require birth date verification before making payments.

 

My chargeback rate is low - less than 0.5% and my refund rate is around 1%.

I offer a very good refund policy and people rarely take it me up on it as all of my product descriptions are precise - the products do exactly what it says on the tin, so they don't buy a product thinking it does something else and then get a surprise.

With my refund policy people come to me instead of initiating chargebacks. The only chargebacks I have ever had have been from people who were using stolen Paypal accounts. I did notify Paypal at the time and try to convince them something was wrong, but Paypal in their infinite wisdom refused to listen and then hit me with the chargebacks a month later! You just need to watch your affiliates if they start making suspicious sales.

If your refund rate / chargeback rate is too high more than 5% or 10% then there is definitely something wrong with your product. It is either poor quality or your description if it is inaccurate.

Cheers

Jason