According to Chargeback911, there has been a 25% average increase in chargeback issuances due to the pandemic. Illegitimate chargebacks are also on the rise, increasing 21% year-over-year between 2018 and 2021 according to Versapay.

As a community owner, you may occasionally have to address customer disputes that can result in chargebacks being initiated. But, there are steps you can take to help prevent this and make sure you have the lowest chargeback rate possible.

Here’s what we’ll cover:

  • What is a chargeback?

  • How to prevent chargebacks

  • How to handle illegitimate chargeback disputes

What is a Chargeback?

A chargeback is the return of money to the payer of a transaction after that payer has disputed that transaction. Most chargebacks occur when a customer claims that the charge is fraudulent (they didn’t actually make the purchase), but they can also happen for other reasons, such as general customer dissatisfaction.

How chargebacks works

Payment processors will typically ask customers to first try and resolve an issue or dispute directly with the seller before initiating a chargeback, with chargebacks intended to function as a last resort.

Why chargebacks are bad

Your bottom line isn’t the only reason why your business should strive to avoid chargebacks as much as possible. Apart from lost revenue, chargebacks are bad because:

  • You can incur chargeback fees, and potentially additional payment processing fees.

  • A high chargeback rate can impact your reputation with payment processors – if you are seen as high-risk, some might even terminate your account.

How To Prevent Chargebacks from Customer Disputes

While you can’t completely prevent chargebacks, you can take steps to help prevent and reduce them:

  1. Make it easy for customers to recognize the charge on their statements

  2. Send payment receipts/invoices

  3. Offer top-notch customer service

The majority of (legitimate) customer concerns can be resolved without the need to escalate to a chargeback. Given that customers should contact you with any issues before they initiate a chargeback, you have the opportunity to avoid chargebacks by working directly with your customers.

Here are some tips to help ramp up your customer service to deal with disputes:

  • Have a clearly defined refund/returns policy that is self-directed so customers have the ability to resolve issues independently if they choose.

  • Respond quickly. If there is a standard wait time to field customer inquiries, it’s good practice to let customers know, so they know what to expect.

  • Create an internal process and train up your customer service team so you can standardize, refine, and scale dispute resolution.

TIP: As LaunchPass is a Verified Stripe Partner, LaunchPass customers can check out Stripe Chargeback Protection as an option to help reduce and prevent disputes.

Win Illegitimate Chargeback Disputes

If a chargeback is initiated and you believe it’s illegitimate, there are a number of ways you can protect your revenue (and your reputation with payment processors).

Understand the chargeback reason

There are “reason codes” associated with chargebacks. Understanding what the reason is will help you to gather evidence to dispute the charge if you deem it worthwhile to do so. This resource from Chargebacks911 gives a great breakdown and also lets you look up specific reason codes.

Stick to Deadlines

If you are able to dispute a chargeback, you will typically have a time window in which you are allowed to do so provided by the card issuer. Make sure you adhere to this deadline. If you don’t, there’s no chance to recover the revenue.

Gather Evidence

Compelling evidence that you’ve delivered your service is crucial to winning a chargeback dispute. There are a number of ways you can do this:

  • Toggle on “Terms & Conditions” and “Require name on card” on your invite page. This will allow you to track that a subscriber has agreed to your TOS and provide proof a purchase was made with the card.

  • Use the Activity Feed in your Admin dashboard to show user activity

  • Find any messages or communication in your Discord or Slack community from the subscriber showing they received access

  • Gather any other communications (emails, other exchanges, etc.) that demonstrate you’ve provided the services you have charged for

If you respond to the dispute with strong evidence, your chances of winning are much higher.

When it comes to preventing chargebacks, the above tips can help ensure that you reduce their frequency, have a better chance of winning disputes when they do arise, and ultimately protect your revenue and reputation with payment processors. Providing exceptional customer service is a must – when your customers are provided a good experience when facing issues, it can help turn them into proponents of your brand.


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