How to handle an unfair chargeback decision on my e-commerce platform?

[jrv2115]

I received a chargeback notification from shopify back in October. I promptly provide evidence to why the transaction was valid and customers claim were false. Today I received notification that I had lost the chargeback. I contacted shopify and I'm being told there is nothing else I can do about it.

My previous credit card processor has always allowed me to appeal the original discussion. A google search will show that this process is called 'arbitration', and I have a right to do it. The only thing that isn't great is if I attempt to appeal the original decision and then lose Visa can bill me up to $500.

Shopify won't let me start this arbitration process. Has anyone else dealt with this before?

To me it's insane that a 'customer' can receive a package from me, ask for a discount because they found it cheaper somewhere else then do a chargeback without returning anything to me.

[Ivy]

Hi @jrv2115. 

I am sorry to hear about your trouble with this chargeback, I can definitely understand how frustrating the process can feel. I just want to clarify that it is not Shopify who make any decisions relating to the chargeback, or arbitrating a decision. Chargebacks are handled and decided upon 100% by the bank processing the payment.

With that being said, they are a real problem for a small business owner and so I wanted to compile some information for you on how best to avoid fraudulent charges, and how to protect yourself from chargebacks in the future:

• How to avoid chargebacks    
• Preventing chargebacks
• Steps for fraud protection

I also wanted to point out to you that PayPal have a Seller Protection option which may help also.  The typical process for a chargeback dispute looks like this:  

1. The cardholder disputes a credit card charge with their bank.
2. The cardholder's bank sends a chargeback request to the credit card company, and takes the disputed amount and a chargeback fee from you.
3. The credit card company asks you for evidence that the charge was valid.
4. You and Shopify gather evidence to figure out whether the charge was valid.
5. Shopify sends a response to the credit card company.
6. The credit card company reviews the evidence. The review can take up to 75 days after the response is submitted.
7. The credit card company resolves the chargeback.
8. If you win the chargeback, then the cardholder's bank returns the disputed amount to you, and Shopify refunds you the chargeback fee. If the chargeback is a partial win, then the cardholder's bank returns some of the disputed amount to you, and Shopify still refunds you the chargeback fee. If the cardholder wins the chargeback, then the disputed amount and the fee isn't returned to you.

I hope this helps to clarify the process, and also hopefully provides some ideas to minimise this risk going forward. 

[Ilya3]

I have not figured out a way to start the arbitration process either. Im not sure how this is legal on shopify's behalf? You should be able to appeal as far as my understanding goes. 

[JaneShi]

The reality is that credit card companies often don’t conduct investigations; they simply appeal to the consumer. This is unfortunate. Shopify should allow us to contact the consumer’s credit card company, or at least provide us with their name. Unfortunately, Shopify doesn’t facilitate this, which we find unfair.