In our company TOS it states that all chargebacks that are reversed will carry a processing fee, since our merchant account provider charges that to us and it isn't refunded.

There is this client that has had 3 chargeback attempts reversed. How should I charge the processing fees to him? Should I add an invoice via ModernBill, email the client, and have the system autobatch and charge him? I'm thinking, if he has already lost the case, even if he tries another chargeback it will likely be reversed.

How do you guys suggest I deal with this situation?

You don't think he is just going to chargeback the extra fees?

Just drop him as a client and move on.

You don't think he is just going to chargeback the extra fees?

Just drop him as a client and move on.

fully agree moving on will save you more problems.

He can try, but he will lose because there's documentation in the chargeback reversals as well as our TOS which clearly states the client will be charged a fee if chargebacks are filed and reversed in our favor.

The thing here is that the guy is costing me a ton of money in the chargeback fees, not to mention the time/effort required to fight them.

Any other thoughts on this besides just letting him get away?

Someday maybe something will be done to help people like us who process credit cards. I find it funny that the credit card companies are so willing to be on the consumer side yet so completely unwilling to help us. In fact, I was told by my merchant card processor that since we don't physically swipe the card we have no basis to argue a chargeback. The industry needs to be regulated by someone other than the companies who are processing the credit cards.

Sorry for my rant...

The funny thing - you can put almost ANYTHING in your TOS, but when it's come to chargeback settlement your merchant provider will bill you without reading your TOS and here nothing you can do and if you bill your customer AGAIN for chargeback fee ($15-$35) - this can cost you relationships with your merchant provider (expecially if you deal with "weak" providers like NOVA or CardService). So better move on and forget about this small fees. I know you and I hate them, but better move on ;)

He can try, but he will lose because there's documentation in the chargeback reversals as well as our TOS which clearly states the client will be charged a fee if chargebacks are filed and reversed in our favor.

The thing here is that the guy is costing me a ton of money in the chargeback fees, not to mention the time/effort required to fight them.

Any other thoughts on this besides just letting him get away?

Or should I invoice the client, and if he doesn't pay, send it off to a collections agency?

Remember, he already lost the initial chargeback disputes. However I'm still out quite a bit for the chargeback fees, which aren't refundable.

what credit card merchant are you using? certain merchants have clauses explicitly against such actions.

Really? You mean they say I cannot collect chargeback fees from clients, meaning I have to eat it? That doesn't sound right.

Really? You mean they say I cannot collect chargeback fees from clients, meaning I have to eat it? That doesn't sound right.

Sounds about right... unfortunately. We just went through a little dispute with PayPal where we ate the amount for 3 chargebacks all from the same client.

We figured we'd dispute the first chargeback and depending on that outcome we'd then worry about the rest. We provided roughly 9 pages of documentation, log files and screenshots only to have PayPal send us a letter saying there was nothing they could do. We then just resolved the other two outstanding issues and ate the cost.

It sucks, but it happens. I believe we get to use these sort of things in our taxes somewhere, no? I'll double check with Mr. Accountant this afternoon. :D Anyways, just move on.

BTW, what type of Chargeback fee are you putting up with? I think the PayPal CB fee was roughly $10.00 USD each!? (I think).

Or should I invoice the client, and if he doesn't pay, send it off to a collections agency?

Remember, he already lost the initial chargeback disputes. However I'm still out quite a bit for the chargeback fees, which aren't refundable.

Well, it depends on what "quite a bit" is for you, I guess. It might not be worth sending the account to collections..

.. but this is generally what I would recommend. If you legitimately provided services to the client and they did a chargeback, then you are legitimately owed payment for the services you contractually provided, and they contractually should have paid for.

Send them an invoice, with request for payment, proof of service delivery, and then if they don't pay within your terms (usually minimum of 90 days), then send it to a collections agency. (Assuming they will accept it.)

You might also try a threatening letter that explains your collections policy and how their credit rating will be effected, etc... then also offer them a discount on amount owing. (ie: 60% will be accepted if they pay immediately, otherwise it's going to collections.)

Good luck.

Sounds about right... unfortunately. We just went through a little dispute with PayPal where we ate the amount for 3 chargebacks all from the same client.

We figured we'd dispute the first chargeback and depending on that outcome we'd then worry about the rest. We provided roughly 9 pages of documentation, log files and screenshots only to have PayPal send us a letter saying there was nothing they could do. We then just resolved the other two outstanding issues and ate the cost.

It sucks, but it happens. I believe we get to use these sort of things in our taxes somewhere, no? I'll double check with Mr. Accountant this afternoon. :D Anyways, just move on.

BTW, what type of Chargeback fee are you putting up with? I think the PayPal CB fee was roughly $10.00 USD each!? (I think).Wow Paypal sucks more than I thought! I would jump ship if I were you. Looks like they didn't even bother checking your documentation. My processor isn't this bad.

Well, it depends on what "quite a bit" is for you, I guess. It might not be worth sending the account to collections..

.. but this is generally what I would recommend. If you legitimately provided services to the client and they did a chargeback, then you are legitimately owed payment for the services you contractually provided, and they contractually should have paid for.

Send them an invoice, with request for payment, proof of service delivery, and then if they don't pay within your terms (usually minimum of 90 days), then send it to a collections agency. (Assuming they will accept it.)

You might also try a threatening letter that explains your collections policy and how their credit rating will be effected, etc... then also offer them a discount on amount owing. (ie: 60% will be accepted if they pay immediately, otherwise it's going to collections.)

Good luck.
Great advice. I might just do that.

Why is he still a client after the first chargeback?

Why is he still a client after the first chargeback?
He performed the chargebacks all at one time.

He performed the chargebacks all at one time.
That makes sense. You can send him an invoice for the chargeback fees, but don't expect them to be paid - If he charged back already, that means that he doesn't want to give up his money. It seems like you'll probably have to write it off as a loss in this case.

Never charge a credit card that you already had a dispute from -- thats just silly.
If you are looking to recover additional fees direct his account to a third party collection
agency. Remember, chargebacks have two cycles. Three really, they can be disputed
once, you can win and they can be disputed again. Then they can be taken to pre-
arbitration which will cost you a few hundred dollars if you lose.

The credit card assocations have rules on this stuff -- but you should NOT charge acredit
card that you received a dsipute from EVEN IF YOU WON because that money is still not
your money for the next 18 months. Take you time spending it on new cback fees...

The client has already demonstrated that he's incapable of properly paying by credit card. I would send him a real invoice, requesting payment by check or money order. If he doesn't pay, suspend his account and sell off his debt to a collections agency. It's not worth it to play this chargeback game with him.

A couple important points are worth mentioning on this:

First... the last thing you want to ever do is try to re-charge a customer for a chargeback fee. All that will do is to incite them, create yet another chargeback, hurt your chargeback ratios with your merchant provider and incur extra cost - it's just not worth doing.

Second... you need to make sure that you very cleverly word this in your TOS -because- if you can state that you are charging an additional fee if the cardholder does a chargeback, that is in violation of Visa & MasterCard rules and in violation of any merchant agreement as a result. (There are ways around this, but you just have to word it properly. One angle is to not use the word chargeback but rather state that in the event that a balance is left unpaid, the client will be liable for a $25 or $35 fee plus interest or something to that effect)

Third... if you want to pursue that kind of a fee against a client, do it through a non-bankcard method. There are collections agencies that you can send an account to and then at that point, either the person will have to pay up or they will get a ding on their credit report at the very least.

Fourth... as much as all of us hate to just "take it" and get burned, sometimes the time, stress & cost of pursuing a bad client for a relatively small amount of money just isn't worth it and it is just better to write it off and be done with them.

PayPal won't let me to file complaint to get chargeback my fraud order - $500 fine pay for violeted TOS and our server hacked. They said they cannot do anything in industry? I don't get it. Oh well let's move on.

I agree that changes need to be made with the chargeback process. More often than not, online retailers end up being hung out to dry.

I would appreciate any advice that you guys have on how you deal with chargeback problems.

First thing to do is to talk to your merchant account, a good merchant account will hear your side of the story and react, just make sure you have proof, which could be logs of his account, his doings, etc as that I see is part of your TOS, using their information for needs expressed by you, the company. If your with a third party, this isn't go to work and I would get a real merchant account!