saasMy website works in “pay per month” system, the user need to pay every month to stay with the product/service or can use only for one month, in this case only not pay for more one month.
Since 2013 I have this website and I receive alot chargeback from PayPal. The buyer made a purchase and after months his cancell this payment.
In my country the chargeback can be made until 6 months after the transaction. In that way, many users pay every month correctly and after five months the user cancell all payments. In this case I need to pay 5 “chargeback fees”.
What is the solution from big company?
How Uber, Facebook, Google, Rackspace, Amazon (AWS or Digital Goods), Steam can avoid the chargeback?
Since last year the PayPal cover the “Digital Goods”, but only for the Disputes in PayPal. About the dispute: the BUYER is always the winner!
How Uber, Facebook, Google, Rackspace, Amazon (AWS or Digital Goods), Steam can avoid the chargeback?
For starters they don’t accept payments using PayPal. That’s a big problem right there which is relatively straightforward to fix and immediately impactful - if only because you now get to actually fight the chargebacks if you so desire.
Next, they honor refund requests, at least for the most part. Better a refund than a chargeback fee. (Unless you’re Ashley Madison and get to fight all refunds and chargebacks by sending extremely embarrassing snail mail.)
What more, they deliver a well respected enough service and they’ve a strong enough brand that even if a consumer asks for a refund they’ll be OK with receiving credits.
Lastly, they use sophisticated (and very expensive) fraud-detection tools. At the slightest doubt you end up a barrage of checks (e.g. Visa calling you by telephone) to double-check that it’s indeed you who are making a payment - you can’t really tell your CC company things like “I didn’t pay for this” if they confirmed on the phone that it was you entering your CC details.
The unfortunate reality is that, in your case, chargebacks are a side effect and a cost of selling digital goods online. There are CC thieves out there who test cards by placing orders on digital goods sites. There’s a - small - minority of consumers who ask for chargebacks instead of refunds on just about anything they’re unhappy with. And an even smaller minority who do the same even if they’re happy. You can think of it like online piracy: you can take steps to fight it, sure. Will it really be worth your time and money to do so? Probably not; unless fighting it means creating a product or service that is so compellingly good that consumers will love you for it and not want refunds.
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If you already do the above, then you may be getting hit with fraud, purchases that are not made by the actual cardholders. In this case, you need to screen your transactions (e.g., don’t accept orders if there is CVN mismatch, etc.).
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