Credit Card Disputes: The Techniques That Increased Our Wins Rate By 740%
If you sell products online and have ever had a credit card dispute filed against you, you know they are notoriously difficult to win for the seller.
Over the years, we managed to develop various and unique techniques that helped us increase our Credit Card Disputes winning success rate by 740% (from 4% to 29.6%), and almost without losing any PayPal Dispute and recovering most of the Chargeback.
Many WordPress sellers give up on dealing with Credit Card disputes entirely, thinking that their chances of winning them are too slim and decided it’s not worth their valuable time. In this video, I’m going to uncover the unique techniques we’ve developed at Freemius, which helped us take our disputes wins success rate from 4% to 30%!
According to a poll among members of the “Selling WordPress Products” Facebook group – most of the WordPress product sellers say that their success rate of winning Credit Card Disputes is lower than 5%.
Others admitted that they ignore Credit Card Disputes altogether.
According to the data provided by sellers – the methods we’ve developed are performing extremely well and much better than the average, so let’s dive in and explore them.
Actually, just before we dive in – why should you even care about disputes as a WordPress product seller?
That’s actually an easy one – it’s because they are inevitable if you sell products online.
Based on Chargebee’s Credit Cards Processing Stats – 6 out of 10 customers admit that they’re unaware of a store’s return policy at the time of purchase AND 8 out of 10 customers admit to filing a chargeback out of convenience!
The sad truth is that even if, as an online store owner, you strictly follow all the regulations, and only charge customers when they actually buy your product, or when there’s a subscription renewal – you are still highly likely to lose a Credit Card Dispute when one is filed against you.
The reason for that is that the dispute triggers the bank/credit card company to immediately refund the payment, which will be deducted from your business’ balance, without questioning the customer, and you’ll have a limited time frame for submitting evidence to prove you are “not guilty”. So basically, the burden of proof is on YOU!
As a customer – that’s exactly what we expect from our Credit Card company. As a business owner – that sucks, but, it doesn’t mean you can’t win.
One of the main reasons sellers lose disputes, even though they are acting correctly and have done nothing wrong, is that they are unable to prove their innocence, or simply don’t want to deal with it. That is a big mistake!
Your payment gateway providers, your bank and the Credit Card companies are all keeping statistical records on the percentage of your business’ disputed payments, and the number of losses vs. wins.
If you ignore a Dispute – not only will you automatically lose it, but it also tells the bank that you agree on the legitimacy of that dispute, practically admitting that you’ve done something bad, as a business.
Those negative points add up and increase the risk of your business getting banned by banks, Credit Card companies, or in extreme cases, shutting down your payments gateway account!
If you think I’m exaggerating – just Google for sellers who have have been using PayPal and Stripe and suddenly got their accounts closed.
So, even if you think you are going to lose a Dispute, it’s still important to submit your counter-evidence, to show all the relevant entities that from your end, you did everything by the book, and that you are not running a “funny business”.
As for the possible dispute types you may have to deal with as a seller – well… there’s a whole list of them, so we won’t go into a detailed review, but let’s just say that if you apply the techniques I’m about to share with you, which we’ve applied successfully in Freemius – you should be well equipped to strengthen your evidence submission and substantially increase the chances of winning those credit card disputes!
So, let’s see what you can do:
The first thing you need to make sure is that you employ a crystal clear Checkout. Avoid any surprises or hidden footnotes, and make sure that the terms of refund, subscription renewals, amount to be charged, taxes, trial periods, moneyback guarantees, etc. – are all crystal clear and stated.
As an example, here’s what we show on the Freemius checkout when a user is about to subscribe to an annual plan.
The clearer the checkout is – the lower the chances for a potential dispute.
In case of a real dispute – you’re also likely to be requested to show a screenshot of those terms and how they are presented to the customer as part of the counter-evidence submission process.
The 2nd thing you should be doing is to prevent fraud by simply verifying your customers’ ZIP code during purchase.