Page 28 - GS231001

Education
ChapterTitle
StreetSmarts SM

Help merchants fight chargebacks like a boss

By Nick Cucci systems can often be manipulated to be used for ill. In to-
Fluid Pay LLC day's world, chargebacks are becoming more common—
and not because more people are not receiving products
ore people are going into business for them- or are receiving faulty ones.
selves, and this is a wonderful thing. A
diverse economy is a thriving economy, but Fraud is more common than anyone likes to think, and
M it does open up new risks. As more people today's small business owners are under attack. More
devise their own business models and enter key indus- people are using chargebacks to commit fraud (see https://
tries, more small business owners are grappling with the tinyurl.com/4crc7fcz), claiming they didn't receive what
negative impacts of chargebacks. they paid for—or that the product was not what they
agreed to purchase, even if they did receive exactly what
This essential tool is now being used more often to per- they purchased.
petrate fraud, and this is upsetting businesses signifi-
cantly. Receiving one chargeback might not be the end In some cases, the issue raised might not even be about
of the world, but chargebacks can escalate quickly and the product. When asked, 44 percent of U.S. consumers
become a significant problem. Fortunately, you can help participating in a study said they consider chargebacks to
merchants push back against them, and I'm going to tell be an appropriate way to politically pressure companies
you how. (see https://tinyurl.com/6m5u7ne8).
What is a chargeback? This type of fraud is impacting small business owners
across a wide variety of platforms. Those who use pay-
For those who are new to the industry, a chargeback ment processing systems, such as PayPal, can be at risk.
is a practice created to protect people when they shop. However, chargeback scams are commonly being used
Chargebacks are designed to give the buyer a chance to in online marketplaces like Etsy, Amazon, Upwork and
dispute charges and get their money back if they pay for Fiverr, too.
something and never receive it or receive something that
is clearly not what they ordered.
When this happens, a business owner will often end up
having a payment revoked, meaning they sold some-
Although we are moving into an age with a diverse and thing, but they did not receive the payment for it, even
thriving digital business economy, this wasn't always the though they delivered as described. As time passes, more
case. Now, for every honorable business owner operat- scammers are using unscrupulous tactics to attempt to
ing online, there are quite a few less favorable ones. So gain free products and services, forcing merchants to
chargebacks are a beneficial tool when used as intended. cope with the loss.
Why are chargebacks a problem for merchants? Push back against fraudulent chargebacks

While the practice of chargebacks was founded upon Great businesses are built upon loyal customers—but
good principles, it is an unfortunate truth that helpful every business owner knows that not all customers are

28