I have a company that has many smaller wesites underneath it. So whenever someone is billed, they see my main company and sometimes must not recognize it. But, it goes to a website where I tell them to email me. I also have a 1800 number and dozens of other ways to prevent chargebacks and to encourage peple to contact me first. But, I still get them. So I was thinking of threatening that I will charge anyone who issues a chargeback the cost of the chargeback. So if somone charges back $15 and it costs $25 for the chargeback fee, I'd charge them $25. I do not plan on doing this, but I just want to use it as a scare tactic to ward more people off, and to also make people be sure that they will not mess with me. Is this legal to do this?
It is likely against the standard terms of your merchant processing agreement. You need to check directly with the company you use to process your payments. Large volume merchants have custom agreements, but you need to be doing huge dollar volume. Practically speaking, it isn't going to work as a scare tactic. As you have experienced, people just do chargebacks when they don't recognize the charge without performing any research.
Yes but I think it would work somewhat, as people would see it and they'd be certain to write the domain down somewhere and not get so chargeback happy.
If you think it will work, then put something on your success page that states "Your credit card statement will show the charge as "Your company name". Our merchant processor charges a $25 processing fee for chargebacks, so make a note of this and call us at (800) xxx-xxxx if you have any questions before contacting your bank." I think this would be fine because you aren't specifically saying that they will incur the charge, also most are going to assume that is what it implies. Also make sure that you processor includes your 800 phone number on the customers billing statement.
Thank you! That is a good idea. Yes I was just thinking if a reader saw "$25 fee" that they would sort of read a bit closer --- so yes , thanks for the good advice.