Say Goodbye to Chargebacks With This Simple Trick 🪄

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📆 Friday, 26^th January 2024

Hi, and welcome back to Growth Espresso - your one-stop destination for everything e-com.

In this Espresso ☕️, let's dive into a topic that often flies under the radar: Chargebacks. If you're running a Shopify business, chances are you've tangled with these financial headaches before.

Chargebacks can be a real punch in the gut for online stores, costing up to 2.6 times the value of the lost merchandise! Ouch, right? 😫 But fear not, we've got a nifty trick up our sleeves to help you bid farewell to those pesky chargebacks. 🎩✨

Curious? Ready to wave goodbye to chargebacks forever? Let's spill the beans below! 👇️ 

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 💳️ Chargebacks - What’s the context? 

Picture this: a Shopify chargeback is when a shopper has an issue with a payment on your store. Their bank steps in, asking you to refund the full amount.

But here's the sting: as the merchant, you not only refund but also pay an admin fee (the infamous chargeback fee) to Shopify. Brace yourself – more charges may tag along based on your payment handler.

The harsh reality? You could be stuck in a long, tangled chargeback dispute. Best case? Invest time and effort. Worst case? Lose a sale, the goods, and dig into your pocket for admin and processing fees.

Hold on, Shopify won't ride to your rescue. Whether you use Shopify Payments or another gateway, they wash their hands of chargeback recovery. No safety net.

In their words, here's the chargeback disclaimer from Shopify:

🪄 Prevent chargebacks forever with this move

This takes a minute to set up and will save thousands in chargebacks and product costs.

✅️ Setup guide

1. Open your Shopify Dashboard

2. Click on ‘Settings’

3. Click on ‘Payments’

4. Click on ‘Manage’ for Shopify Payments

5. Scroll down until you find the 'Customer Billing Statement' section

6. Add your ‘Company Name’ + 'Number Code' in the Customer Statement Descriptor. For example 'SP * Ecom Zone 8426'

7. Update this code occasionally

✅️ How it works

For any medium/high-risk orders, email the customer and ask them to verify the number code that shows up on their bank statement. In the example above, the customer would have to provide the code: 8426. Place this order on hold until they verify your unique 4-digit code.

Most scammers will only have the stolen credit card details and will not have access to the cardholders' bank accounts to verify this code.

If they cannot verify this 4-digit code even after you help them locate it, then cancel the order.

If the customer provides this 4-digit code and still opens a chargeback after processing their order, then it is very likely that you will win as long as you provide the bank with all of the evidence.

✅️ Use cases

1. Medium-risk orders

2. High-risk orders

3. Multiple payment attempts

4. The billing address doesn't match the credit card details

5. The customer is shipping to another address with a different name

6. High-value orders

7. High-risk internet proxy used to place the order

8. The cardholder's name provided does not match the name on the shipping address