2 ms·

1) There are a couple of protection for sellers. a) a floor limit - where visa/mc/etc cover the chargeback if it's under a certain amount ($5-20 is common)... i

1) There are a couple of protection for sellers. a) a floor limit - where visa/mc/etc cover the chargeback if it's under a certain amount ($5-20 is common)... if it is in your contract at all, it's limited to physical stores. Ecommerce/card-not-present is explicitly excluded. b) if they can prove the keys were delivered to the card holder, and the cardholder is not claiming fraud/misrepresented goods/etc, then you can usually dispute the chargeback. This is harder than it sounds, because you need to ship to the billing address via a trackable service and obtain a signature from the cardholder when it is delivered. If you've ever shipped via UPS/FedEx then you know they will often not collect the signature, or they will collect it from another person at the address, or leave the package at the door, or the signature is illegible, etc, etc, etc. 2) I've seen chargeback fees between 10 and 50$ (25-30 is common). This is a fee from the bank that provides your merchant account.. so it varies. It's a fee for handling the chargeback.. keep in mind the bank must receive the chargeback, forward it to you, accept your response, send it to the customer's bank, etc. Does that cost $22? Definitely not. Merchants are responsible for verifying the card is not fraudulent, and they accept the risk of fraud when they accept the order. If the merchant does not control the level of fraud, they'll see their merchant account terminated. The threshold varies by merchant bank.. I've seen as low as 0.2% up to 1%... but merchants usually don't get to see this number.

gamblor956 14y ago
This is why you would use a service like Paypal: the contract with PP does include digital goods, and in fact Paypal is very good about backing the merchant in situations like this, so long as you can provide evidence of the purchase (including, for example, evidence that the customer used the purchased digital good after the challenged transaction).
- rgbrenner 14y ago
  My experience here is from running an ecommerce store.. so we actually ship the product to the customer. I believe banks would accept digital proof as long as it established: 1) the cardholder made the purchase; 2) the cardholder received and/or used the digital goods. But that is really only useful if the cardholder says they did not receive the license key/digital goods. If they say you misrepresented the item, or they did not make the purchase (because their card was stolen), then I can't imagine how you would dispute the chargeback. And in that regard, PayPal is the same. If the PayPal user says their PayPal account was hacked, and they didn't make a number of transfers.. PayPal will undo the transactions.

gamblor956 14y ago

This is why you would use a service like Paypal: the contract with PP does include digital goods, and in fact Paypal is very good about backing the merchant in situations like this, so long as you can provide evidence of the purchase (including, for example, evidence that the customer used the purchased digital good after the challenged transaction).

rgbrenner 14y ago
My experience here is from running an ecommerce store.. so we actually ship the product to the customer. I believe banks would accept digital proof as long as it established: 1) the cardholder made the purchase; 2) the cardholder received and/or used the digital goods. But that is really only useful if the cardholder says they did not receive the license key/digital goods. If they say you misrepresented the item, or they did not make the purchase (because their card was stolen), then I can't imagine how you would dispute the chargeback. And in that regard, PayPal is the same. If the PayPal user says their PayPal account was hacked, and they didn't make a number of transfers.. PayPal will undo the transactions.