Keeping Online Retailers Free From Profit Damaging Chargebacks

Online retailers have a lot of challenges and one of the largest risks each faces is the concern of consumer fraud. It is very easy for people to commit fraud with the anonymity of online shopping. This means that one simple type of potential fraud known as chargebacks has been a concern for all retailers. The rate of chargebacks any company experiences will have a dramatic effect on their final profit margin. Even the most reputable company with the highest quality of products can lose their business if they are unable to control this one type of fraud.

Chargebacks do not all occur for the same reason and not all are based on fraud. There are numerous causes that result in this type of transaction and most retailers are cautious to be fair and understanding when the refund is for a legitimate reason.

  • It could be a claim from a consumer that the retailer charged more than was advertised for the product.
  • A fault in the item sold could result in a chargeback to cover the warranty.
  • The shipping or other fees related to the sale may not have been authorized and the buyer insists on a refund.
  • Someone other than the account holder may have made the purchase.
  • The account used to make the purchase could be invalid or an expired account.
  • Errors may have occurred that resulted in an overcharge or a duplicate charge that needs to be returned to the customer.

In some of these instances, the chargeback does not harm the retailer. For example, the reversal of an accidental overcharge will not take away profit from a seller. It only ensures that the consumer only pays for what they received. However, many other chargebacks do cause harm. This is especially true when there is no way to retrieve a product after a refund is made and there is very little recourse for a reputable retailer when their reputation is unfairly besmirched. There are companies that are helping to change all of this for retailers. Visit to read more about how some companies are managing (and reducing) chargebacks to prevent the damage they cause. =