Is it uncommon or unethical to avoid a charge back by sending a Money Order?

I assume you mean that someone signed up for your service and you want to avoid *them* from making a chargeback by sending them money? If so, you can refund their money directly to their card account.

Watch refunds and chargebacks as the card processors take this as a bad sign. Also, if you send a money order, you *still* risk having a chargeback issued by the customer, which would create a big mess for you.

You can give money back in any form you want. But as Chicken said the person may still do a chargeback. From their POV there's still a wrong charge on their CC.

From your question I assume what you are asking is can you send a money order instead of issuing a refund to the customer's credit card?

If the customer paid by credit card, then you must refund to that same credit card. It's in your merchant account service agreement (read it - it's a standard requirement of all the credit cards). Sending a refund by any other method violates your merchant agreement and could cause you to lose your merchant account if your merchant bank finds out about it.

Plus, it doesn't prevent the customer from disputing the charge. Hey - what's better than getting your money back? Getting back twice what you paid! Anyone unscrupulous enough to fraudulently dispute a charge is unscrupulous enough to take the money and run.

Bottom line - issue the refund to the credit card and be done with it.

Jason

I maybe mistaken, but I think he meant: is it uncommon or unethical to require payment by money order to avoid chargebacks.

Possibly he means a refund? If they chargeback, they get their money back to their CC account. So no money order is possible.

Refunding with a money order is probably what he meant, or what was stated above and charging by money order, but that wouldn't bring much business.

Yep. Now after actually looking at the subject, it is indeed about money back guarantees.

AFAIK, doing a refund does not look bad on your merchant account record. It's only if the customer requests a chargeback that it looks bad. If you have refunded the customers money to their credit card, they CAN'T request a chargeback. Better to be proactive than reactive.

What he was asking is if you think it is wrong or uncommon to only give refunds in the form of a money order to avoid people asking for refunds.

My bad. I'd go with the previous advice given: don't do it! You not only are possibly breaching the terms of your merchant account agreement, but you're also opening yourself up to given both a refund AND getting a chargeback.

What's the advantage of doing it via a MO?

thanks for all the advice!