Credit Card Disputes: The Techniques That Increased Our Wins Rate By 740%

Many WordPress sellers give up on dealing with Credit Card disputes entirely, thinking that their chances of winning them are too slim and decided it’s not worth their valuable time In this video, I’m going to uncover the unique techniques we’ve developed at Freemius, which helped us take our disputes wins success rate from 4% all the way up to 30%! According to a poll among members of the “Selling WordPress Products” Facebook group – most of the WordPress product sellers say that their success rate of winning Credit Card Disputes is lower than 5%

Others admitted that they ignore Credit Card Disputes altogether According to the data provided by sellers – the methods we’ve developed are performing extremely well and much better than the average, so let’s dive in and explore them Actually, just before we dive in – why should you even care about disputes as a WordPress product seller? That’s actually an easy one – it’s because they are inevitable if you sell products online Based on Chargebee’s Credit Cards Processing Stats – 6 out of 10 customers admit that they’re unaware of a store’s return policy at the time of purchase and 8 out of 10 customers admit to filing a chargeback out of pure convenience! The sad truth is that even if, as an online store owner, you strictly follow all the regulations, and only charge customers when they actually buy your product, or when there's a subscription renewal – you are still highly likely to lose a Credit Card Dispute when one is filed against you The reason for that is that the dispute triggers the bank/credit card company to immediately refund the payment, which will be deducted from your business’ balance, without questioning the customer, and you'll have a limited time frame for submitting evidence to prove you are “not guilty”

So basically, the burden of proof is on YOU! As a customer – that's exactly what we expect from our Credit Card company As a business owner – that sucks, but, it doesn't mean you can't win One of the main reasons sellers lose disputes, even though they are acting correctly and have done nothing wrong, is that they are unable to prove their innocence, or simply don’t want to deal with it That is a big mistake! Your payment gateway providers, your bank and the Credit Card companies are all keeping statistical records on the percentage of your business’ disputed payments, and the number of losses vs wins

If you ignore a Dispute – not only will you automatically lose it, but it also tells the bank that you agree on the legitimacy of that dispute, practically admitting that you've done something bad, as a business Those negative points add up and increase the risk of your business getting banned by banks, Credit Card companies, or in extreme cases, shutting down your payments gateway account! If you think I’m exaggerating – just Google for sellers who have have been using PayPal and Stripe and suddenly got their accounts closed So, even if you think you are going to lose a Dispute, it's still important to submit your counter-evidence, to show all the relevant entities that from your end, you did everything by the book, and that you are not running a “funny business” As for the possible dispute types you may have to deal with as a seller – well… there’s a whole list of them, so we won’t go into a detailed review, but let’s just say that if you apply the techniques I’m about to share with you, which we’ve applied successfully in Freemius – you should be well equipped to strengthen your evidence submission and substantially increase the chances of winning those credit card disputes! So, let’s see what you can do: The first thing you need to make sure is that you employ a crystal clear Checkout Avoid any surprises or hidden footnotes, and make sure that the terms of refund, subscription renewals, amount to be charged, taxes, trial periods, moneyback guarantees, etc

– are all crystal clear and stated As an example, here’s what we show on the Freemius checkout when a user is about to subscribe to an annual plan The clearer the checkout is – the lower the chances for a potential dispute In case of a real dispute – you’re also likely to be requested to show a screenshot of those terms and how they are presented to the customer as part of the counter-evidence submission process The 2nd thing you should be doing is to prevent fraud by simply verifying your customers’ ZIP code during purchase

Businesses reported that the most effective fraud prevention technique is address verification Now, you don’t really have to validate the whole address Simply validating the zip code associated with the costumer’s card will do If you're using a payment gateway like Stripe, it comes with a really great Machine Learning-based fraud detection mechanism called “Radar” If you force the zip code validation, you can include it as part of the evidence you submit, which will significantly increase your chances of winning Fraud-related Disputes in which customers claim they didn't use the card

Number 3 is to only share your WordPress product’s download link via email, and not directly after the checkout Why? Because if they download the paid product, you can be certain that they are in fact receiving your emails, which is a very strong evidence for most of the CC Dispute types The downside here is that the customer may not receive an email from you for different reasons like a typo in the address or other deliverability issues This can be easily addressed by including your technical support email address in a prominent spot they cannot miss – customers contact support in case they need to When you only share the download link via email – in some cases, users make typos when they type in their email address, and this may lead to “product not delivered” type of disputes

An easy workaround we’ve come up with that both validates their email address AND does not add another input field which badly affects the checkout form’s conversion rate, is to only show that additional email validation field after the customer had entered their email and first name This approach will eliminate most of those “product not delivered” claims Moving on to the next technique that helps us tackle those “product not delivered” claims is a very important but simple one: Track the download event! If you can prove that the customer had indeed downloaded the product, and are able to include details such as when and from which device, then you are most likely going to win that CC Dispute type Simply track those events to be able to present that data if you need to, and it will also help you when selling to customers from the European Union, where the “14-day cooling off period” applies and says that a customer from the European Union can return the supplied product for any reason and get a refund during 14 days That rule is a little different for digital products, for which it is respected only if the customer did not unbox the product – meaning, they didn’t download it during those 14 days

If you sell subscriptions, we have a great technique that helps us void most of the “fraudulent” disputes” where the cardholder claims that they didn’t authorize the payment It is quite simple actually: we email a subscription renewal reminder enough time in advance, and we track the open event Here’s an example of the events section of a site with an active subscription on Freemius: As you can see – it clearly shows that the subscription renewal reminder was opened by the customer 2 hours after it was sent We can submit this as part of the counter-evidence and it’s almost certain to win us the dispute because we can prove that the customer knew about the upcoming renewal and had enough time to cancel it Another crucial piece of data which can tremendously help you win disputes and that you should be collecting is the IP address of the customer during purchase

The IP address is, de facto, the shipping tracking code of digital goods in the eCommerce world It’s a mandatory field that you have to fill in when submitting evidence for any type of Credit Card or PayPal Disputes The IP address helps the bank to validate if there’s a match in the geolocation associated with the IP address and the cardholder’s address and check if the cardholder had ever logged into the bank or creditcard’s website from that IP When there’s a match, obviously it refutes most Fraudulent-type Disputes I’ll add to that, that in general, the more data you can show about your product’s usage by the customer, the better

Things like the URL of the WordPress installation that’s using your premium theme/plugin, what's the WordPress/PHP version running on that site, etc All these data points make your evidence stronger, which makes it harder for the Credit Card representative that is reviewing the data to deny it For example, if you can show an event log of your customer performing a product version update – it will completely refute their possible claim of not using your product anymore We’ve all heard of the common confusion that deactivating a product also automatically cancels its subscription To tackle that – when a customer clicks on your premium plugin’s deactivation button or tries to switch from your premium theme to another, instead of just deactivating your product, ask the customer if they are interested in canceling the subscription as well

I recommend you do that only after checking if the license is associated with any additional websites – you don’t want to cancel their subscription for all of them One of the things that confuse cunsumers the most when they read their Credit Card’s statement at the end of the month is if they see a company name that they do not recognize A good practice would be to make the product’s name similar or at least close to the company’s name so that it makes sense for the customer and doesn’t make them think they’ve been frauded In case your company’s name does not resemble your product’s name – you can use the Dynamic Soft Descriptors to control and modify the description that will appear on the customer’s credit card statement and make it more familiar to them This will significantly reduce the “Unrecognizable Charge” Dispute types

To wrap up all of my advice here – I just want to add one more tip that can save you a ton of time when dealing with credit card disputes and submitting your counter-evidence to fight them: My suggestion for you is to automate whatever you can in those efforts As a developer, you can almost fully automate the whole process of collecting all these data-points and transactional events, and then pull it out of your database to quickly generate your counter-evidence That’s what I’ve got for you in this video – hopefully, it is useful for your business I think that you should definitely implement the proven practices which I’ve demonstrated above if you want to keep running a healthy business