Chargebacks Are Not Fun

As if I had to state this, right?  For any newbies out there, a chargeback is when a customer disputes a charge with their credit card company and you, as a merchant, have to respond in writing your side of the story.  Disputes can arise for any number of reasons.  Things like proof of delivery, quality complaints, the product not being as expected all can result in customer dissatisfaction.  Ideally, the customer contacts you and gives you the opportunity to fix the issue, but sometimes they go straight to the credit card company and you’ve got a problem.

In my case, the customer did contact us.  We did everything we could to resolve the situation (in fact, we went above and beyond our policies to try to make things right) but the customer still wasn’t happy, so he got the credit card companies involved.

I truly feel bad about the whole situation, however I have put up a fight because I know that we are not wrong.  At this point, both the customer and I have written two letters explaining our sides, and I guess it’s up to the credit card companies to decide who wins.

I’ve felt sick to my stomach this whole time.  No matter what, I’ve lost a customer and maybe lost some money to boot.  This whole situation has really got me thinking about return policies.  Now just for reference, this was an order for personalized goods.  And the customer knew that they couldn’t be returned because they were customized to his specifications.

In his book, “The 4-Hour Workweek “, Timothy Ferriss writes that a store should offer a 100% return policy (plus return shipping!)  no matter what, and you will prosper in the end.

But, when you sell some goods that are personalized (and therefore not resell-able), how can this be done?  I’m just not sure.

I’d love to hear from some readers.  What are your thoughts on this?  What is your return policy?

2 Responses to “Chargebacks Are Not Fun”

1. Jake Bergen Says:
   November 23rd, 2009 at 2:22 am

   I am going to disagree with Tim Ferriss’ 100% Return Policy. I think he is a great author, loved the book, but there are more factors to consider. Profit margins, ticket size, nature of goods (personalized) or in violation of your terms and conditions. I recommend having a lawyer draw up your terms and conditions, it will help get rid of any loopholes and give you confidence in dealing with chargebacks. Tim Ferriss also said in his book that people are basically honest. In my experience, some people are basically honest, and some people are basically not! There is a good example of that in this article… http://bit.ly/Invisi
   You have terms and conditions to protect yourself and your business, and people will respect you more if you stick to your guns. If you have lost a customer anyway, the best thing you can do is fight for what is right and get over it fast. Yes, the goal is 100% customer satisfaction, but anyone who says they have 100% customer satisfaction is lying. There are some people in this world who just refuse to be satisfied. Those are the people that you are better off not having for clients, let them be someone else’s problem!

2. Steven J. Husak Says:
   March 3rd, 2010 at 11:44 pm

   Take it back. Give them a refund or a full credit toward their next purchase..

   Did you know that Nordstrom started out as a small shoe store? They always had a take it back no qustions asked policy. They became known for their great customer service. Since starting in 1901 they have grown to a $7 billion company. They take back products without proof of purchase and no matter how old the product is! And we both know you cannot resell used shoes!

   The goodwill you are costing yourself is extremely short-sited. How many people has this consumer told to never buy anything from you? Is it really worth the tightness in your stomach, the hurt feelings. Just think how much better you’d feel right now if you’d cheerfully said we’ll take it back!

   Even if you take it back for a company credit so you have the chance to make this consumer happy when they make the replacement purchase, it is just good business. Like it or not, we live in an age of consumerism.

   Then there are all of the sites where consumers can go to write their complaints. There are even hate pages on Facebook. Consumers are savvy these days…if they never heard of your site they may google it and find some nasty stuff about your business. How much will that cost you? even if you write a response, you’ll be wrong in the eyes of most potential customers that hear about it.

   Good luck!

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