Have you ever hustled and treated your fans well, only to see some of the purchases that were made in the past taken back without explanation? It’s frustrating, isn’t it?
Any consumer can at any time dispute a charge and begin the process known as a chargeback, and this is what this article is about.
This right cannot be revoked by us, ModelCentro, nor can it be revoked by any authority.
To put it simply: by a consumer request, their bank “takes” the purchase amount from the recipient account and sends it back to the consumer account. A bank does not require any approval for this transaction, nor does a dispute procedure exist to reverse it.
Since chargebacks are inevitable, it is important to understand that they are part of running a business in our e-commerce world these days, whether we want that or not. But anyway, let’s start from the beginning.
⚠️ Which payment methods allow chargebacks?
Among all payment methods available to your site members, only the following ones allow chargebacks:
SEPA Direct Debit
Credit Cards (Visa / Mastercard / JCBcard)
When it comes to Credit Cards, things may not really be as bad as you think - currently, the chargeback rate on our platform for CC is <1% on average, which means that out of 100 sales, potentially 1 sale only results in a chargeback.
But when it comes to SEPA, not everything in the garden is rosy. SEPA Direct Debit (SEPA DD) is a bank account-based payment method available across the Eurozone, which can be used for both e-commerce and recurring payments and is a real pain in the ass chargeback-wise: a chargeback is possible up to eight weeks after the transaction without supplying any justification on a no-questions-asked basis. A site member can automatically get their money back with just 1 click of a button in their banking application since there is no dispute resolution process in existence.
⚠️ Why do we still use SEPA DD when it has such a high chargeback rate?
SEPA is one of the most popular payment methods in the EU and significantly increases overall sales coming from European countries. Despite risks associated with SEPA, our analysis shows that even when 10% of SEPA transactions result in chargebacks, the model's earnings are at least 18% higher than they would have been without SEPA.
It means that even if you lose funds through SEPA chargebacks, you gain more anyway.
⚠️ How can we reduce chargebacks?
You (creator)
Always communicate openly and clearly with your members in Messages.
No false promises - always deliver what members pay for.
Optionally, put a message on your main page on how to cancel membership/automatic renewals.
Optionally, tell the fans who ask you to cancel their memberships to contact our support via [email protected] for help.
Us (ModelCentro)
We actively go after the members who chargeback. Not only are they instantly blocked from making any other purchases through CentroBill, but depending on their location, we may send debt collection after them to recover the money.
Intelligent security - our system tries to identify cases of fraud before they happen. We are often able to preemptively stop chargebacks and, in some cases, increase the fan’s satisfaction and spending.
ModelCentro and CentroBill work tirelessly to ensure that you get all the money you’ve worked so hard for! We always cover the chargeback fees applied on top of the initial amount, and those fees are often higher than the original chargeback amount.
We do collect about 20% of SEPA DD chargebacks, which is a pretty healthy number. Of course, any chargebacks that are collected are 100% put back into your account.