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Chargebacks Are Not Worth Fighting

Wednesday, May 16, 2007

For whatever reason, some merchants are not worrying about chargebacks.  They might only get one every few months but they are not replying to it.  I guess they feel that the card associations are going to rule against them, so why bother? Well you bother because it is your business, it is your right to fight.

For example, if someone were to walk into your store, load up a basket full of items and walk out the front door - you would stop them, right?  By not fighting a chargeback, you are allowing the customers to walk right in and take whatever they need.  OK, you might have insurance but guess what, your insurance rates will go up because your risks are going up.  Your merchant account fees will also go up or they might even suspend or terminate you because you are a higher risk.

Retrieval Requests and Chargebacks

Of course, the first is to always try to prevent a retrieval request or a chargebacks. A retrieval request could be as something as simple as I don't recognize the name of this company.  I wrote about this because this happened to me once as a consumer: Some Ways to Help Internet Merchants Reduce Fraud and Chargebacks.  It also happened back in October.  I sent in my yearly membership fee to Sam's Club.  Over the weekend, I was checking my credit card statement online and noticed a charge for Wal-Mart.  Since I knew I had not been to Wal-Mart, I called the credit card company and told them the charge was unauthorized and to send me a new card (I thought my card had been compromised).  The next day I remembered I had used that particular card to pay for my Sam's Club membership via United States mail, but surely a company as large as this and actually wanted to get into this business would have a correct merchant identifier on the credit card statement?  It turns out I was wrong, since the charge was the same amount as Sam's Club's fees. 

Just to remind you just in case - always respond to a chargeback, no matter what.  That is unless of course, you are a merchant who opened a merchant account to process thousands of fraudulent credit card transactions in a short period of time.  Yes, those people do exists and you want to make sure that your provider does not think you are one of those types of merchants.

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