Chargebacks: Merchants Need Better Protections - It's time we get some

Snowleopard18
New Member
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Hi - this is a bit of a rant about the 'status quo' on chargebacks and I have a couple of questions too.

I received a chargeback for an order.

The reason was: Chargeback reason: subscription canceled

However I do not sell *any* subscriptions on my website at all and the customer was shipped small women's accessories physical product.

What really happened was the customer ordered twice (I assume by accident) as they were to two separate shipping addresses on each order she wanted each of her orders shipped to.

She never contacted us to cancel either of the two orders. So we shipped both her orders and we later reached out to her regarding her second order just to let her know that because it was being shipped to a different location (further away) this order would take longer to arrive than the first order.

She then realized she had ordered two different orders and said she didn't want the first order which now had already been shipped off. We told her she could just return the one she didn't want for a full refund once she received it. She agreed to this.

Then later (while it was still in transit) a few days after she submitted the chargeback on that first order anyway.

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Today - We lost the chargeback claim and the bank sided with the customer.

So my question is: As this was a *subscription* chargeback request - how can the bank have sided with the customer when we don't even sell any subscription products at all on our site? It just makes no sense to me. That alone should have been reason enough for the bank to side with us. How can they win a chargeback on a service that never even existed in the first place?

Also, how can we better protect ourselves as merchants then? Doesn't seem to me like it was looked into thoroughly/properly by the bank.

Apart from the subscription issue (we don't have subscriptions) - we also still showed the bank the full email correspondence with time stamps evidence of when she requested the cancellation to when it was shipped out and time stamp she notified us. Along with a copy of our cancellation policy and also screenshot images (plus hyper links for the bank) showing that the customer was shown this cancellation information about our cancellation timeframes and had easy access to contact us throughout the buyer journey, even on every product page we have this cancellation information, plus also in our footer also, at checkout in hyper links and even in their emails and SMS notifications after ordering in big text. I really don't know what more we could do..

Plus we showed the bank the 'successful' delivery status of the product with order tracking details via a legit shipping service (USPS.com) - showing time it was not only shipped out and that it was indeed delivered to the customer and they received it. We also showed in our email correspondence we would be happy to refund the customer upon return of the product and help the customer. And would still honor that even after the chargeback request as we care about our customers.

It just makes no sense, I'm not angry, I'm just more confused than anything and now want to know how to better protect myself as seems like there are no real other options for me as a merchant? (apart from bringing in lawyers - which would be costly and therefore pointless for a $50 USD product which the bank/customers know this.. so that is how they win, the merchants just has to suck up the loss.. but $50 USD losses can add up over time). And because it's unjust.

Not only do I not sell any subscription products in my store for her to be able to dispute but this was indeed the customer’s mistake accidentally placing two orders to two different addresses not ours yet we are now out the product costs, shipping costs, the sale profits, plus the bank charge fee for the chargeback processing ($25 USD) - plus our labor/time costs to process this order.

And we have the NoFraud app on our website and Shopify fraud detect which showed "normal" and so safe to process -  we also showed the bank these Shopify fraud detection details too that showed "normal."

It's just extremely unfair.

So I want to know how better to protect my store, are there even any plans for new protections to come in to help protect merchants better? As I really don't know what more we could have done?

I'm also curious what information does Shopify send the banks? As Shopify should have known I don't sell subscription products or services and passed that information along to the bank also.

I know this is an issue for many merchants - friendly fraud etc or just actual customer accidents like this.. however something needs to change where merchants also have more say and power to dispute these charges because as e-commerce grows this problem will also grow and it is merchants who are left high and dry. I think companies like Shopify and also especially the banks need to do more to come up with new ways to protect merchants more also, not just customers. The banks win either way. So pressure needs to be put on them to do more also - hopefully by companies like Shopify and larger merchants - who have more power to advocate for those kinds of changes in bank policy etc.

In this video, this happened in 2017 (4 years ago now) to this man who was selling protein power online and he lost $100K+ to a fraudster because of weak protections for merchants with bank policies and payment processors policies like with PayPal etc - and is a prime example of why things need to change now and much more pressure needs to be put on the banks and e-commerce platforms like Shopify, Stripe, PayPal etc to step-up more protections for merchants too as e-commerce is growing so rapidly now and will continue to - I don't think merchants should just have to put up with the status quo anymore and just accept these losses as "just a part of doing business." We at the very least need more pressure put on the banks etc to do something about it for better policies to protect our businesses - which are our livelihoods too. 

Video: https://youtu.be/fCuHkDjUbY0

Thanks

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