This transcript was generated from the episode audio and may contain minor errors.
[Music]
Oh no, our listener today received a charge back from the payment processor she uses to accept credit cards. This is never good news. Is there anything she can do about it? Welcome to Sadistle School. My name is Chris Guillebeau.
Should you ever find yourself in this situation where you have charged something for a customer with their permission, of course, and then they have later gone back to complain to their credit card issuer? What do you do in that situation? If you ever find yourself there? Well, I will have a detailed response with some clear action steps you can follow, but just remember first, it's important to talk about things like this, to have a plan, but remember that most customers will be happy, okay? Most of your customers are gonna be very happy.
Also, you can't serve a ton of people without someone being unhappy. So first things first, focus on the law of averages in this situation, but let's talk about it specifically with those action steps right after this message from our sponsor. [Music]
Hi, Chris. This is Jessica from Salt Lake, and I've been listening to the show for a couple of years. I've really enjoyed this show's new format, and I hope you continue that.
In "The Money Tree," Jake gets to charge back on his student loan consultation service, and the bank isn't helpful. He's only able to solve the problem by tracking down the person who complained to the bank and dealing with them directly. Well, I got my first charge back this week, and I'm a little frustrated. A customer bought a set of vintage China from me on eBay. Nearly a month after it arrived, they filed a charge back with their credit card company.
I've already left a positive review for this person, so I feel like I have no leverage. I've emailed them three times to see what the problem was, but they won't respond. What should I do? Thanks. Hey, Jessica, thank you so much for listening.
So glad you're enjoying the format. I too have enjoyed it quite a lot. Focusing on listener questions has been really rewarding for me as well. So glad to know that it's mutual. All right, what is a charge back?
Let's talk about that first to just kind of take it back for some listeners who might not be familiar. A charge back is when a customer disputes a charge on their credit card. Usually what happens as a merchant is that you get a notice of this action. You get something sent either in the mail or by email, and then the funds are withdrawn from your account, whatever that original charge was, often along with a fee. And then there's a period of time in which you can contest the dispute.
Your payment processor brings you the charge back and says, "Do you have a response?" Okay, and first things first, charge backs are no fun. As a small business, they can be very demoralizing. You're like, "I already sold something. "I thought that customer was happy." Or, "Even if I didn't think they were happy, "I didn't think they were gonna come back "and actually file this kind of complaint." And the thing is the credit card companies want to be perceived as consumer friendly. So the burden of proof here is often on the merchant.
Like you have to prove, "Oh, I was right to charge that person." So whether it's Jessica's instance with the vintage China or anything else, you can always dispute the charge back. Like there's always a right of appeal. It doesn't go on forever, but at least there is a first right of appeal. And if it's a small amount of money, you might not want to bother. You might think, "Well, I'm not gonna worry about this.
"I just wanna move on with my life," which ultimately is what you wanna do, move on with your life. But as long as you feel you're in the right about the dispute, it's often in your best interest to at least file a short response. Because the credit card companies do keep up with the number of charge backs and the ratio to sales, et cetera. So of course you want to remain in good standing. Now, some companies will allow you to do this online, which is great.
That's obviously a much better way to do it. Sometimes you still have to mail something in old school. Whatever you have to do, hopefully it's online. Let's say you want to include a copy of the original transaction. Show that payment receipt or any kind of online record.
Include any communication from the customer. Include a link to any terms and conditions on your website. So for Jessica's case, if she sold something that was clearly marked as non-refundable and the customer acknowledges receiving it, like there's no dispute of that or there's a tracking number, but then that person files a charge back, send along all that info, whatever it is. With a well-documented response, your odds of winning the dispute go way, way up. So avoid anything personal or emotional.
Just stick to the facts. Look, this person bought this thing. It says clearly it's non-refundable or maybe it was refundable for 30 days and it was nine months ago, whatever it is. We know that they received it. So we do dispute this charge back.
If you win the charge back, the funds go back into your account. I would say that these things can sometimes end up being somewhat arbitrary. Sometimes you think like, oh, it was really clear here and here are all the facts, but they still went against me. At least it seems that way. So in the end, as I said, either way you need to move on and just remember that most people are good.
Most people are good. Most customers are gonna be happy. Hopefully Jessica will sell her vintage china to lots and lots of other people who will give her a five-star rating. At least that's my hope. Thank you, Jessica.
Thank you, listeners. If you have a question, come to sidehustleschool.com/questions. We will continue to feature them throughout the year, along with updates from other listeners as they launch their projects. I hope you're taking care of yourself today. Be sure to check up on somebody else as well and do come back tomorrow.
My name is Chris Guillebeau. This is "Sodasal School." [Music]
- From the Onward Project.
