What is a Credit Card Chargeback

WHAT IS A CHARGEBACK?

AN INTRO FOR EVERY SMALL BUSINESS OWNER WHO ACCEPTS CREDIT CARD PAYMENTS

© 2017. Equilibria, Inc.

FLUSHING MONEY DOWN THE DRAIN


CHARGEBACKS ARE LIKE… 2

the charge a credit card merchant pays to a customer after the customer successfully

disputes an item on his or her credit card statement . ~Investopedia.com

A CHARGEBACK IS…

”“


3

If one of your customers successfully disputes a charge from your

company, the credit card processor will not only require you to

credit or charge back the disputed amount to the customer’s

account, but will also charge you an additional penalty.


4IN OTHER WORDS…

Merchant & Processor Relationship -

How it Works

+


5

When you accept credit cards, you

are known as the merchant.

You have options for how you

accept credit cards. Both options

require entering into a contract with

a credit card processor where you

will pay either a flat fee or % of each

sale to process a payment.

DIRECT OPTION

INDIRECT OPTION

If too many of your customers request

chargebacks, the processor can actually

freeze your account and end your contract.


6

THE FOLLOWING IS BASED ON A TRUE STORY

The events described on the next few slides took place in Atlanta, GA USA in 2006.

Names have been changed to protect the business owner’s identity.


7TRUE

CHARGEBACK

STORY

Meet Sam Milton. He

worked hard to build his

online business, Stuff, Inc.

After a successful launch, he

knew he needed to prepare

for the avalanche of business

sure to come over the holiday

season.


8TRUE

CHARGEBACK

STORY

Sam’s preparation

included:

Hiring more staff

Negotiating shipping

and delivery costs

Website testing

Pricing items


9TRUE

CHARGEBACK

STORY

Sam gained his e-commerce

knowledge by being a vendor

on Etsy.com.

The experience taught him that

the Nov. – Dec. timeframe

accounted for 75% of his

annual sales!


10TRUE

CHARGEBACK

STORY

SEPT OCT NOV DEC

But there was one thing Sam forgot.

When customers purchased

products, the vendor name cited on

their credit card statements was

Sam Milton, and not Stuff, Inc.


11TRUE

CHARGEBACK

STORY

Confused, many customers called

PayPal to report fraudulent activity.

Because the number of people

disputing charges in a short period

was so high, his bank froze his

account.

Sam lost all of those sales and not

only had to return the money but also

pay additional fines.

Unable to recover financially, Sam

shut down his online store.


12TRUE

CHARGEBACK

STORY

In Sam’s case, the one thing he did not have in place

once he launched his online store were processes.

Specifically, processes for handling product returns

and chargebacks. © 2017. Equilibria, Inc.

13BUT THERE’S HOPE…

Maximize Profit from Every Sale

Processes are just one of the things Sam needed to prevent chargebacks.

Gain more insights from Sam’s mistakes and avoid costly chargebacks with our additional tips.


Yes, I Want Free Tips to Protect

My Business from Chargebacks

14

https://eqbsystems.lpages.co/prevent-chargebacks/



Thank You!


Alicia Butler Pierre

Founder & CEO

Equilibria, Inc.

15

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http://www.eqbsystems.com/

http://www.eqbsystems.com/
