Chargebacks and how to handle them

What is a chargeback?

Chargebacks are a service that payment gateways provide for people who have an unauthorised payment from their account and wish to reverse the charge. This can often be abused and because of this we offer chargeback prevention.

There are normally three types of people who chargeback, those who are doing so maliciously, people who have had their payment information fraudulently used to purchase a package on your store, and those who are doing so because they have had an issue with the service/virtual item they have purchased. In this article we offer a bit more information on chargebacks in general and how to combat them on all fronts.

What we provide to prevent malicious chargebacks

Our current chargeback protection is a global banning system where a player’s IP and username/UUID are banned from purchasing if their chargeback percentage is higher than the stores chargeback threshold.

It works on the percentage of chargebacks a player has made in relation to complete payments across every single store on the Buycraft network, making the system really comprehensive at keeping out the players who have charged back maliciously before.

For example if a player has made 2 chargebacks out of 5 payments then their chargeback percentage would be 40%. The store owner then chooses what percentage of chargebacks a player can have and still purchase on the store.

Chargeback fees

PayPal - $20
Paymentwall - $25
Stripe - $15
2Checkout - $20 (US sellers) $25 (non-US sellers)
PayGol - Does not have chargeback fees

What you can do to resolve them

If the gateway you use has a dispute system before the full chargeback happens, then the best way to resolve an open dispute would be to get in contact with the player and try to resolve the issue with them first.

You may also want to contact the payment gateway to ask them what information they’ll need to help resolve the dispute. Here are some examples of what they might ask you to provide:

  • Your terms and conditions
  • Proof that the customer was made aware of your refund policy
  • Proof that what they purchased was as described

Communication is key here and can mean the difference between losing or winning a dispute.

How you can further help prevent chargebacks on your store

Some of the best ways for reducing chargeback rates on your server store can be pretty simple, such as having an active support channel like email or forums where you can talk to players who might have issues with the content they have purchased from you.

One of the big issues which can increase chargebacks is a confusing refund policy. Your refund policy needs to be clear and detailed so that the players know exactly how it works at a glance.
Also, being clear and detailed about what players are receiving once they purchase a package is important to make sure there is no miscommunication which could cause a problem in the player’s eyes.

Fraudulent unauthorised purchases can be legitimately charged back by the owner of the player and you will not be able to dispute. If you have the chance, then communicating with the person charging back could make it possible to arrange a refund rather than incur the chargeback fees.