Chargebacks: A Business Problem You’d Best Care About

In this article by copywriting great John Forde, you’ll learn ten ways to minimize getting chargebacks from dissatisfied customers.


In early 1974, nobody wanted to use credit cards. And this, my friend, would have been a problem if it had never changed.

Mercifully, however, it did.

Today, we’ve got plastic galore. And lots of other ways to pay that are credit-card adjacent, like Apple Pay, Paypal, and so on.

It sure makes our jobs easier, yes? Anything, after all, that streamlines the sale can’t help but be good for selling.

What you might not know, though, is how you owe a lot of that good fortune – and today, a big problem – to a big change that arrived that very same year.

It’s called the “chargeback.”

This, in case you’re unaware, is the regulatory beast that lets customers contest charges by calling up their credit card company to say “I didn’t buy that.”

This was huge. Suddenly, all or most fear of deceptive merchants, surprise charges, and the rest evaporated… and the use of credit cards skyrocketed into the mainstream.

Here’s the thing…

Decades later, it’s gotten so easy to contest charges, it’s perhaps TOO easy. Even for merchants who try to run an honest business.

And yes, as a copywriter, it’s something you have to care about. Because in ways you’re about to see, you might be part of the problem. But you can also be part of the solution.

See, part of the reason chargebacks are a growing business problem is that they’re now so much easier to initiate.

Customers can go to their credit card website and click a button. It’s a kind of “lazy man’s refund” policy. No customer service to call. No question of when you’ll get charges reversed.

Just instant protection.

On the seller’s side, however, it’s no small thing. It’s not just the sale that gets canceled. There’s the risk of losing money on products you’ve already shipped. There’s also the risk of banking your business on sales you thought were completed.

And then this – you might actually lose your merchant account as punishment from the credit card company if your rate of chargebacks runs too high. And “high” is a pretty low percentage of overall sales, maybe 2% or so of orders.

And it doesn’t stop there.

Processing chargebacks involve fees. They might also involve lost shipping and handling costs. Plus, costs for restocking. On average, US merchants can get hit with about 206 chargebacks per month.  And every $100 in chargebacks can eventually cost the merchant $240 total. Of course, it’s not so bad for some but worse for others.

So what’s that got to do with you, if you’re “only the copywriter?” It turns out, plenty. Check out this list below. It includes 10 possible ways to cut down chargebacks. And it could make you a hero with clients. Here we go…

1) MAKE YOURSELF “KNOWN” – According to the folks over at PayPal, one of the biggest reasons customers initiate a chargeback is because they just to recognize your company on the bill. Be very, very clear about who you are when you deliver your products or show up on the bill. Try creating a very descriptive URL that will show up on bills and in your welcome letter.

2) MAKE YOURSELF WELCOME – Speaking of welcome letters, have one. Have a series of them, in an auto-responder “here’s how to get started series. Try having a quick start-up report or CD or DVD or webpage full of welcome videos too. On high ticket items, try sending a snail mail welcome letter too. Plus, a gift that guilts them into sticking around. Or even a promise of a future gift, which they’ll get “when it’s ready.” That way, you also leverage anticipation.

3) FEATURES, NOT JUST BENEFITS – We all know that selling is about putting the benefits out front. But there’s one place you want to emphasize features — that is, what the customer will get, much more — and that’s in the close. Or at least, on the order form. Spell it explicitly, so nobody is confused or feels jilted by what they receive, both of which are also frequently the cause of credit card chargebacks.

4) BE VERY EASY TO REACH – How infuriating is it when you buy something, want to know about something you want to buy, or whatever… and the company you’re trying to reach makes has a “Contact Us” page that’s more impenetrable and unwelcoming than Fort Knox? Yes, exactly. So don’t be that client. And make sure your client isn’t that client either. Be easy to reach for questions, complaints, or comments. Contact forms, phone numbers, or — my favorite — live customer chat.

5) BE QUICK TO RESPOND – Speaking of customer service, there’s a story about how Jeff Bezos tested customer hold times on the phone. In a big meeting, he asked how fast those times were and an exec replied, with no proof, they were less than a minute. So Bezos dialed in to test the claim, using the conference room speakerphone. Four and a half agonizing minutes later, a customer service rep picked up. The exec resigned shortly after. Guess what customers do when they can’t get through. That’s right, they cancel orders.

6) CHECK THE WAY YOU TAKE CARDS – If your order form doesn’t ask for that little code on the back of the credit card, require it. And, per Forbes, review other ways to step up card authorization too. Adding the Visa Account Updater, for instance, will automatically update cardholder info and cut back on authorization declines. Asking for a delivery address can help, though that’s not going to make as much sense on a digitally delivered product.

7) NO HIDDEN CHARGES – It’s fine to charge a monthly fee. It’s fine to charge shipping and handling. It’s fine to charge service fees, restocking fees, and all the rest. Even if all of those might be slightly off-putting. Because you might find they just make for good business. However, it’s NOT fine if you’re not completely and actively upfront about those charges existing. As a copywriter, that goes for us too… hiding the charges will only come back to bite us in the end.

8) DON’T KEEP THEM WAITING – In the age of Amazon, FedEx, and even overnight postal packages, the days of “six to eight weeks” are pretty much over. If you or a client take someone’s money, make sure they get what they’ve ordered ASAP. Lots of chargebacks happen in that dead zone of “where the $@#%& is my order!”

9) MAKE PROMISES YOU INTEND TO KEEP – This is otherwise known as “sell good stuff” and sell it honestly. We all know, yes, that promise is the soul of persuasion. But here too, if you’re trying to promise the moon but only intend to deliver moon pies… you’ll eventually pay for that too. Unhappy customers cancel charges at a greater rate. They go tell friends to cancel them too.

What’s the number one way to avoid chargebacks? I personally know some folks who won’t like this last suggestion, because they balk at the idea of creating a nebulous future obligation, but…

10) OFFER REFUNDS AND GUARANTEES – Yep, this is highly controversial. Some say offer the biggest, most generous refund policy you can stomach. Others say that’s reckless, like creating a black cloud of future obligations and uncertainty. But in the end, guarantees do easy buyer anxiety. And well-written, they can protect the customer’s butt too.

This last one, of course, is worthy of in-depth coverage all its own. Maybe in a future issue. Maybe even in the next issue. We’ll see, until then, see you next week!

P.S. There are so many other anti-chargeback tips I could mention. But let’s just go with a link like this one:

52 Tips to Reduce Chargebacks from the Experts | Soarpay.com

For more copywriting and business advice (and get $78 in free gifts), sign up for John Forde’s Copywriters Roundtable.  http://copywritersroundtable.com

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