A chargeback occurs when the buyer makes a purchase from you then contacts their bank (Visa, MasterCard, Amazon Pay, PayPal, etc) to demand a refund from the banking institution. Usually, you are surprised by the chargeback because the buyer never contacted you with any issues but on occasion the customer was so BatSh*t Crazy that you expected it. Either way, YOU MUST FIGHT IT. If you do not fight the chargeback you will automatically lose AND if you fail to respond a black mark is put on your account; if you get too many black marks you can actually completely lose your ability to process payments… seriously! So, don’t panic; just follow this guide.

STEP 1: You MUST respond fast, CORRECTLY. So as soon as you find out about the Chargeback you need to get started (or, if you can’t tackle it right now, set a reminder in your phone for tomorrow) because if you forget to reply, the black mark WILL be applied to your profile. I *think* you typically have about 14 days to respond but we always bang it out in 48 hours. DO NOT START RESPONDING UNTIL YOU FINISH READING THIS SERIES.

STEP 2: STOP ALL COMMUNICATION WITH THE BUYER and DO NOT CONTACT THE BUYER DIRECTLY. Due to the buyers actions, the time to resolve any issues has (unfortunately) passed, so investing time into trying to make the buyer happy is nothing more than wasting time. The buyer can NOT “drop the chargeback” once it is already in progress. So if the buyer tells you “Don't worry, I’ll call my bank now and cancel it” - THEY CAN’T. You MUST reply to the chargeback.  However, if you do have an email from the buyer stating they never filed a changeback against you, this can be used as evidence.  Also, if you contact the buyer and ask WHY they filed the chargeback, the buyer might say "Because it arrived damage.  If you ship a replacement I will be happy!" - If you choose to ship the replacement to make the buyer happy there is still a 50% chance that you could LOSE the chargeback, so this would mean that the buyer would have 1 damaged item, 1 brand new replacement and a full refund!  So, since the buyer chose to file the dispute instead of contacting you, DO NOT SEND the buyer ANYTHING.  Do NOT issue a refund.  Simply respond to the dispute and see what happens.  IF you win the dispute and you still want to make the buyer happy, you can do so once the dispute is 100% closed. 

STEP 3: Look at the CHARGEBACK REASON. The actual chargeback form will say the reason, or code, that the cardholder used when they filed the chargeback against you, In general, these are the most common chargebacks:

NOT AUTHORIZED - This means the buyer claims *they* never made the purchase. For example, someone stole / hacked their credit card numbers (or Pay Pal account, Amazon Pay account, etc). Sometimes this can also mean someone the buyer KNOWS used their card without permission.

NOT RECEIVED / SERVICES NOT RENDERED - This means the buyer claims they didn’t get what they paid for

NOT AS DESCRIBED - This means the buyer agrees that they received something but, they feel is is different than what they paid for

DAMAGED / DEFECTIVE - Obviously, this means the buyer is claiming the merchandise isn’t in correct / working condition.  For example, if you shipped a television, but the screen arrives cracked, this would be considered Damaged or Defective. 

DUPLICATE CHARGE - Buyer claims they were charged more than one time for the same product

There are other reasons but the 5 shown above are the most common.

STEP 4: Now that you know the reason for the chargeback, let’s discuss how to address each claim:

NOT AUTHORIZED - Your only goal is to try to prove that the buyer did place the order. Your goal is not necessarily to prove it ARRIVED because the buyer isn’t saying “it never came”, the buyer is saying “Someone stole my card! I never ordered this!”.

See if you have had any communication with the buyer. Have the sent you any emails? Have they sent any direct messages to ask questions? If they have, get screenshots showing the date.

Do you have ANY previous orders from this buyer OR the Billing / Shipping address? If you can prove this same person ordered 2 years ago, you will be able to prove the current order is legitimate. We once had a husband and wife get divorced. The husband then filed chargebacks against all of the wives purchases from our company. We were able to win the disputes because we could prove an ongoing order history.

Google search the order information because you can uncover a lot! Here’s two Must-Read articles we wrote explaining how to look up all of the details: How to Tell if the Order Placed on Your Site is a Scam (Stolen Credit Card Number Fraud and 6 Steps to Take if You Shipped a Fraudulent Order Paid with Stolen Credit Card Numbers. While you are researching the order information, it’s possible that you may discover someone really DID have their credit card numbers stolen and you really did fall victim to a credit card theft scam ring. If you come to this realization you can still try to fight the dispute OR you can “accept” the dispute and “take the L”. You will lose your money but you will not get a black mark from failing to respond.

NOT RECEIVED / SERVICES NOT RENDERED - This is easy to win. All you have to do is prove it was delivered. If you didn’t ship it with a tracking number, let this be a lesson learned; ALWAYS get tracking and ALWAYS make people sign for it when it is an amount that you can’t afford to lose. Additionally, you can go to USPS (or the carrier) and ask for proof that it was CORRECTLY delivered. Most carriers will provide you with this, but you have to actually GO to the carrier. Calling over the phone is totally useless. If the merchandise in question is USPS; if one post office is rude to you, try a different location. The three locations closest to our warehouse are TERRIBLE, which is why we use a post office in a different city. The Romulus, Michigan USPS is friggin AMAZING. Seriously, the nicest people you’ll ever meet!

NOT AS DESCRIBED - You will almost always win this dispute IF you can prove the buyer didn’t return it. All you need to do is show it was delivered and state that the buyer never contacted you to ask for a return and the buyer never returned it. Be sure to attach your actual listing to the dispute and any photos or videos you have available. On that note, IF the buyer DID return it, you can’t keep their money and the merchandise. However, you *could* refuse delivery and force it to be sent back to the buyer. But as soon as you accept delivery, you now own it again, so just issue the refund and move on with life.

DAMAGED / DEFECTIVE - This is also almost always a win for the seller IF the buyer didn’t return it. Follow the same instructions as listed above in NOT AS DESCRIBED.

DUPLICATE CHARGE - Did the buyer actually get charged twice? It is very difficult (basically impossible) to double-charge a buyer if you’re not manually running payments. In 15+ years I have never seen this actually happen.. However, many years ago we did have a buyer throw a tantrum about a double charge. Upon further infestation we discovered the buyer actually placed two duplicate orders; yes, they were charged twice, but they also ordered the same thing two times in a row! LOOK AT THE ORDER NUMBERS! If the duplicate purchase has two different order numbers, this is actually the buyers fault. 

LASTLY, remember how earlier we discussed possibly working with the buyer to make them happy AFTER the dispute is closed?  One important thing to know is that even after the dispute is finished the buyer CAN APPEAL the decision.  So, let's say you won the dispute and you still want to keep the buyer happy so you ship out a replacement item to make up for the damaged item.  This means the buyer now has 1 damaged item, 1 new replacement and you have the money for the sale; this sounds great... BUT THEN the buyer can "Appeal" the decision and essentially re-dispute it.  The second time around the buyer might win, so the buyer would have both items plus full reimbursement.  Just keep this in mind. 

Next, Read: Top 5 Tips for Winning a Chargeback Dispute