Ask HN: How common are credit card disputes?
I run a SAAS website, and recognise that we have some workflow related payment blockers. Putting that aside, we've had cases where customers were actively trying to cheat us out of paying for services provided by us.
I was wondering how frequently this happens, and if the data differs across industry or types of services. How common are credit card disputes at your company, and are they legitimate or are customers trying to cheat you out of paying?
4 comments
[ 3.7 ms ] story [ 15.2 ms ] threadFor both my paid services, I send an email every time somebody's card is charged. The first line explains the charge, and the next two paragraphs tell you how to learn more about what we are, why we charged you, how to cancel, and that we are happy to refund you for any reason.
That last bit is an entire line by itself.
And then we still get a handful of chargebacks each year. Usually from the boss, who gave his card to an underling to buy our thing. And often they'll remember this when I remind them and still not cancel the chargeback.
It's frustrating.
You hit the nail on the head here. In the more "degenerate" spaces, chargebacks are high. The more trustworthy the products/services, the higher ticket the items, and the more gracious the return policies, the lower the rate of disputes.
So for example: If you're running an adult site selling pay-per-download pornography for 99 cents, you're going to see tons of chargebacks and disputes all the time. If you're selling high-touch services (like Notary-Public services or something), where there is a trust-relationship between you and the buyers, your rate will be much much lower.
There are a lot of factors that raise and lower the chargeback rate, but I've found industry and type of services to be the most important. People charge back for all kinds of reasons (regretting the purchase, slow delivery, finding a better deal elsewhere, not wanting to deal with customer service), but generally the better the relationship between your company and the customer the lower the dispute rate will be. The more they respect you and what you're selling, the more they admire your brand, the lower the rate. If your brand comes off as a snake-oil-salesman, there's no trust there, no respect, and here come the chargebacks. Hope that helps.