How long does a person have in which to dispute an order, ie. request a chargback? 2 months, a year, what?

Well i thought a month. But in the last week we have had over 4 from 2 months ago so i amnot sure. We did try to stop them but no good. Plus you have to think about if a card is or was stolen so this is a hard one really. :)

There is no real time fram. But, the longer it goes, the harder it gets. Just keep good records and try and fight every one that comes in. We all get them at one point or another. It is part of doing business. Just try and not make a habit of it.

Just try and not make a habit of it.

*lol*
Good advise :)

Seriously though. If you have a good payment provider they'll have the records you need stored away and will usually go into bat for you. How much good even that will do is questionable as CC companies usually side pretty hard on the card holder's side.

At the end of the day though - you can never have too much paperwork lying around...

Greg Moore

Normally credit card issuers have a 6 months timeframe in which customers can dispute a charge.

If you don't have the authorization with a signature from the customer, then they will credit the amount back to the customer. (99% of the time)

It's sad, but true.

Every credit card I have has 60 days as the time period within which I can dispute a charge. That is 60 days from the date of the statement on which that charge appears. I think this is pretty well the standard. We have consumer reporter in out are with a radio talk show, and he is always telling consumers that 60 days is the limit. That could mean, that from the date of the charge, the consumer could have up to 90 days to dispute.

So, how frequent are charge backs for web hosting companies (when you don't overcharge)? I'll be jumping into the game next week and this one makes me curious.
Keith

It happens. No telling how often with any given host. Much depends on the client involved.

Do most charge backs occur from accidental over-billing or because the client signed up and then tried to pull out and deny registering? or why?

A charge back is when the customer calls his/her CC company and says "I'm not paying for that charge!"

Why they do this? Many reasons. Yes, it can be due to an honest mistake. But unfortunately many people try to get something for nothing or just plain don't see the need to pay. And the way the laws are (at least in the U.S.) it's 99% in favor of the customer.

I know a woman who owns a sporting goods store. Each year she looses thousands when someone comes in, buys many items, then letter she gets notified the customer charged back the sale. They (the customer) never contact her, never tried to return the items, etc. Just took it and refused to pay. Short of suing there's little she can do. In terms of hosting I've heard stories of customers signing up for service, then several months later not only cancelling but charging back for the X-months they had.

Hopefully all this doesn't happen too often to you.

So what happens if a client signs up for the 30 money-back thing and then decides they want their money back? Not that I'd have a problem with that and would want to refund their money, but would that fall under a charge back? or if they click order button too many times? Does the processing companies (like revecom & instabill) consider this a chargeback?

No, issuing a refund/credit is different from a chargeback.

The other problem with chargebacks is that if you get too many of them your merchant account can be cancelled, and it makes it difficult to get another one. Unfortunately, chargebacks are really stacked against the merchant. The credit card company is always going to take the word of their customer over a merchant, and you have to pay the bill.

We've had to start asking for 2 forms of ID to be faxed over when someone overseas orders a dedicated server, because we got hit a number of times. I'm sure we have lost a couple of sales because of this, but we have to COA :).

A charge-back is initiated by the customer. A credit/refund is initated by the merchant and (usually) doesn't count against the merchant.

In terms of a X-days money back guarantee you can either 1)Put through the charge and then refund it if they cancel with in the time limit; or 2) "Authorize" but not charge (most processors call it "deposit") the amount, then if the cancel you just cancel the authorization and if they don't then you deposit.

Let me explain that second one a little more:

When a merchant charges a customer's CC there are really 2 steps the processor does:

1) Checks the customers account to see if they have sufficient balance available for the charge (as well as for a valid credit card, AVS etc) and if so the charge is "authorized". That is, the amount is removed (reserved) from the customers credit line.

2) The CC processor then "deposits" the amount of the charge, less fees and discount, to the merchant's merchant bank account. That's how the merchant gets paid.

Typically these two sets are done back to back (more or less) behind the scenes. But with most CC processor the merchant can opt to do the 2 parts seperately. The merchant can "authorize" the charge today, then at a later time "deposit" the money. This is often done when the customer places a big order and the merchant wants to ensure there's sufficient credit to pay for it but isn't ready to put through the full charge.

Let's say you offer a 30 day money back guarantee for the first 30 days BUT the setup fee is non-refundable.

Are there any ways to keep the setup fee (to compensate you for your time) if the client does a chargeback?

No, if their bank sides with them and issues the chargeback and you do not or cannot rebut it then they walk free :mad:

If you feel you have a very watercase case you can dispute the chargeback. In some cases your billing provider may even go into bat for you. Having said that however, card companies side with their clients 99% of the time. You can't blame them really, but it does open that door for people to abuse the system. 99% of people though do play by the rules and consider social norms acceptable practise. ;)

At the end of the day it's just part of trading on the net.

Greg Moore

Originally posted by Sebastian
Let's say you offer a 30 day money back guarantee for the first 30 days BUT the setup fee is non-refundable.

Are there any ways to keep the setup fee (to compensate you for your time) if the client does a chargeback?

IMO if you have clearly stated on your sign up for, TOS or whatever that the setup fee is non-refundable you be able to keep it. OTOH, as previously stated, CC companies tend to side with the customer so there's little guarantee. And most hosts these days don't charge a setup fee anyway so that alone could be a negative.

But... you forgot something... can't remember who said it (someone on this forum) but...

"what's web hosting?"

Also, we living in a paperless environment...

It's not easy proving things without a hardcopy

With the US and Australia(that i know of so far) legally accepting digital signatures I hoped that would bring some relief to the chargeback situation. But I don't see the banks making any changes with respect to that.
I hope it does. Because if any one uses the computer with the digital signature, the owner should be held liable after all he is allowed the option of password protecting his signature. I know its a far cry from what is actually going to happen. But do you think it will work.

:cool:

So having a TOS is almost worthless unless they sign it and send it back to you?

you might want to check out http://chargingback.com
they are small but growing and should have more chargeback specific stuff.
:cool:

Thanks, I think I'll have to signup and check that out.