This kind of thing makes me so mad. It's definitely not the first time it's happened.

I receive an order at one of my sites. It looks suspicious; I start checking addresses, domain registrant info, IPs. I see too many bad signs, refund the payment in full, and reply to whatever e-mail was provided that their order's been cancelled.

A couple days later, I get an e-mail from the actual card holder asking what the charge on their card is for. I explain the order placed, I explain that we thought it was fraudulent as well, and I explain that a full refund has already been issued and give the date/time. I also ask that she remembers this when issuing any chargebacks for other payments made with her card, that we've already issued a refund and she doesn't need to start a chargeback. She acknowledges and thanks me very nicely for the help.

A few days later... I get the chargeback... and it's dated after our e-mails.

Just felt like writing it down to get out some anger.

Oh, here's another good one I just got in my e-mail. This guy just notices a fraudulent charge four months down the line and wants a refund. The credit card is already expired and the terminal won't let me issue a credit to it. Great. There's another chargeback that could've been avoided, but now I can do nothing about.

Hopefully you did not get charged any fees since you had already refunded the payment.

This is why we vet all hosting orders and only do a pre-auth. It helps out a lot in the long run.

But if refund and chargeback meet each other banking networks , then the refund becomes chargeback. Pre-auth is always good option. You will have enough time to check the transaction before capture it.

The credit card frauds are rising day to day, they get the number somehow and use it to buy something.

THe loser is none other seller, because the card holder asks for an chargeback.

Originally posted by Corey Bryant
Hopefully you did not get charged any fees since you had already refunded the payment.

Oh, I'm sure that'll be $60 in chargeback fees for those two on top of the lost money. Not to mention raising my chargeback ratio for the month for absolutely no reason.

It should not have become a chargeback - you should have 5 business days to refund the money yourself.

Originally posted by Corey Bryant
It should not have become a chargeback - you should have 5 business days to refund the money yourself.

Not True.

I have merchant account with CDG Commerce, I refunded one payment within 72 hours as it was fraud, and i informed the real person about it, later he closed his account or something, and around 1 month after that I recieved a dumb chargeback, and CDG Commerce took $30.00 from me for it:eek:

So it is either way, we the sellers are screwed!

Well every situation, merchant, and processor is different. Plus depending on when he closed that account and the issuing bank, you might not have been able to issue a refund

I think the situation is as HenryJ described it - the chargeback shows up in Chargeback Defender (online list of chargebacks received), but it does seem to be automatically marked that the refund was already issued. As far as I know, the chargeback fee gets charged when anything shows up here regardless of the previous refund.


Received Date 2005-05-28
Reason Code 83 - Non-Posession Of Card
Resolved Date 2005-05-29
Verbose Reason CRED 052505, ARN 74721875147014603014237

I think its the issuing bank who is at fault because they are the ones who should be able to see the refund in the customers account and should not initiate the chargeback request. I think they get a piece of the chargeback fee so I dont think cdgcommerce has a choice but to charge you, although $30 is pretty high.

-MM

Hi Dan,

Yes - that output from Chargeback Defender means that the chargeback came through (as mandated by Visa/MC) but that you were not actually deducted for the amount of the sale.

The reason why is that our system detected that a credit return had been issued and so it automatically re-presented the chargeback back to the issuing bank with electronic documentation of it.

The end result is that you were not deducted for the amount of the sale and only the chargeback service fee. Unfortunately, while the system can prevent the deduction of the sales funds, the service fee is a cost that we incur and pass-through on a chargeback.

I'm sure that most merchant processors would love to be able to refund the chargeback fee on a successful rebuttal outcome but regardless of the result, we are all charged for the chargeback processing ourselves so it is one of those unfortunate aspects to the business.

Hope that info helps! :)

Originally posted by cdgcommerce
I'm sure that most merchant processors would love to be able to refund the chargeback fee on a successful rebuttal outcome but regardless of the result, we are all charged for the chargeback processing ourselves so it is one of those unfortunate aspects to the business.

Yeah, I understand this and know from this same situation occurring before. This post was more a vent about how customers and banks deal with things than how you do.

Also, I e-mailed that first customer and expressed disappointment that a chargeback came through after I had refunded her, and she said she never initiated a chargeback and had told the bank that I issued a refund when she reported everything. I assume the bank went ahead and issued a chargeback on everything purchased with the card anyway.

Originally posted by cdgcommerce
so it is one of those unfortunate aspects to the business.

Hope that info helps! :)

Unfortunate for WHO? Not the credit card companies. They make whatever the situation.

Fraud Sale: Merchant loses sale money/processing fee plus chargeback fee.

Fraud Sale: Credit card company makes interest on the sale. Makes money on the transaction and then makes chargeback profit.

So UNFORTUNATE only belongs to the merchant. Every transaction for the card company is FORTUNATE. Fraud or not.

Simon