This guide will explain what a chargeback is and provide best practices for chargebacks. However, chargebacks will be handled between you and your payment processor as no monies pass through Cratejoy.
What is a chargeback?
A chargeback is when funds are returned to a credit card owner after they report an incorrect or unwanted transaction on their card to the credit card company.
Why would a chargeback be filed?
- Fraud - This is when the credit card owner reports that they did not make or authorize a transaction. This may happen when a credit card number is used without permission.
- Non-Delivery - This is when a buyer makes a purchase—and that purchase goes through—but the buyer never receives the item or items purchased.
- Not as Described - In this case, a purchase is made, but the buyer receives an item(s) that is different than what was listed, or different from what the buyer thought they were purchasing.
- Return - A credit card owner can request a chargeback if they’re not satisfied with the item(s) purchased and received. This could be for a variety of reasons, including damage.
- Dissatisfied - A chargeback can be filed if the buyer is not satisfied with their purchase.
How does a chargeback get filed against me as a seller?
A credit card owner, who may or— in some cases—may not be the buyer, contacts their credit card company and requests a refund for the transaction. The reasoning for the refund could be one or many of the types listed above.
Merchant best practices for chargebacks
Although chargebacks cannot always be completely avoided, here are some steps you can take as a Merchant to help prevent them:
- Provide a reasonable and accurate shipping date and ship the order accordingly
- When you ship an order, mark the order as shipped. You should only mark an order as shipped when you actually ship an order to a subscriber.
- Provide valid proof of shipping with all orders. Also, be sure to provide proof of delivery for items shipped within the US. Valid proof can include a shipping or tracking number that shows the package was delivered
- Communicate with the subscriber about the status of their order, any questions they might have, and any additional details agreed upon in the transaction
- Publish your policies for shipping, returns, exchanges, and custom orders on your store’s FAQ page and Marketplace listing.