What To Do If You Receive a Chargeback

Rhea duFresne-Mann
What To Do If You Receive a Chargeback

Uh-oh. Have you received a that dreaded notification that one of your customers has opened up a chargeback on an order you painstakingly sent out to them? No need to panic - in this age of the internet, this will almost certainly happen to every business owner at least once 💛

First of all, what is a chargeback on the Shopify platform? If a customer who used their credit card at checkout disputes the charge with their bank, a chargeback is opened. This can usually happen because of two general things:

😔 1. A genuine reason

😠 2. You have probably been scammed

Most frequently, I see Number 2. It is hard to escape or eradicate scamming in ecommerce as the internet is a big place. However, if you get scammed and the scammer issues a chargeback, they are most often ruled in your favour as the evidence stacks up against the scammer quite easily. Again, this is a generalisation and by no means will this be the case for everyone.

This is a typical chargeback process for the Shopify platform:

  1. The cardholder contacts their bank and disputes the charge for the order placed on a website. Their reasons could be anything from not receiving the order to the product being faulty, to a stolen card being used.
  2. The bank sends a chargeback request to the credit card company
  3. The disputed amount and a $20 NZD processing fee is taken from the merchant.
  4. The merchant then has an allocated period of time to submit any and all evidence to back up their claim that the charge was valid. Evidence can include messages between customer and merchant, fraud protection order alerts, postal service delivery notifications etc.
  5. A banner will have appeared on the order page of the Shopify admin. Once the evidence has been gathered, the merchant submits it via this banner which is forwarded on to the credit card company.
  6. The credit card company will then review the evidence, which can sometimes take up to 75 days.
  7. The chargeback is resolved and the parties are notified.
  8. If the chargeback resolves in the merchant’s favour, the disputed amount and $20 fee will be refunded back to them.
  9. If the chargeback doesn’t resolve in the merchant’s favour, the disputed amount and fee will not be returned to them.

For some more in-depth reading, check out this Shopify help doc.

If you find yourself faced with a chargeback and don’t know what to do, contact me today and let’s make a plan together!

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