Dating Website Chargebacks

Table of Contents

1. What reason codes are common for dating app chargebacks?
2. How dating services can prevent chargebacks
3. Great customer service prevents chargebacks
4. Use chargeback alerts
5. Document transactions thoroughly
6. Chargeback representment evidence
7. Do mobile payments increase the risk of chargebacks?
8. Is a chargeback the same as a refund?
9. What is friendly fraud for mobile apps?

When people meet a new couple for the first time, they often ask "how did you two meet?" For four out of ten of those couples, you could skip directly to asking "what dating app did you meet on?" The ascendancy of online dating should come as no surprise. It has been a tremendous boon for many people, enabling them to find romantic partners without relying on awkward blind dates set up by well-meaning family members or having to compete in the proverbial meat market of their local bar scene.

Many of the advantages of eCommerce have carried over to online dating — the breadth of choice, the ability to search according to specific criteria, the removal of geographical barriers — but instant fulfillment is not one of them. There's no guaranteed algorithm for finding love, and it's not uncommon for people to become frustrated with their lack of success in the online dating world. When this happens, it's easy to lay the blame the dating site or app itself, and chargebacks often follow.

Oftentimes, these chargebacks are accusing the dating site of engaging in deceptive business practices, but unless the site is writing undeliverable promises and guarantees into its terms of use, the site is meeting its obligations to its customers and cannot be held responsible for the eternal challenges of finding meaningful human connections. Dating sites should always fight these illegitimate chargebacks and recover their lost revenue.

What reason codes are common for dating app chargebacks?

Chargebacks against dating websites and apps follow predictable patterns. Most chargebacks against them are filed for essentially the same two or three reasons, and although these customers are typically dishonest with their issuing bank in order to be granted a chargeback, their claims will still usually fall under one of the following reason codes:

• Fraudulent transactions
• Services not received
• Canceled services
• Credit not processed

A typical scenario would be a dating site customer giving up on the site and forgetting that they signed up for recurring billing. The fact that many dating sites offer renewals on three, six, or twelve-month schedules rather than standard monthly payments makes it both more likely that customers will forget about these payments and more likely that they'll dispute the charge when it comes through, since the amount will be higher.

When the renewal charge hits, the customer disputes it as "fraudulent" or "already canceled." Customers may also dispute active subscriptions as "services not received" when they aren't having luck meeting people.

Dating services receive "credit not processed" chargebacks for the same reason other merchants do: impatience. If the merchant chooses to refund a customer, but that refund takes longer than the customer expects, they might dispute the charge.

How dating services can prevent chargebacks

When customers dispute transactions for emotional reasons such as disappointment or frustration, they aren't always thinking about the actual rules and evidence requirements. They feel like the narrative alone should be sufficient to compel the bank to reverse their charge, and they're not wrong: banks will often accept a dispute if pressed by the customer.

Fortunately, the major card networks have recently put effort toward tackling the problem of banks granting illegitimate chargebacks to their customers.

Issuing banks are now required to obtain more detailed information from the customer about the transaction and their reason for disputing it, and must include this information when filing a chargeback.

This means it's now more common than it once was for a bank to discover that a customer's dispute is likely illegitimate and refuse to process it.

Unfortunately, merchants can't rely completely on the banks' due diligence to prevent illegitimate chargebacks. There are three things they can do to tackle the problem themselves, however: offer great customer service, use chargeback alerts, and fight chargebacks.

Great customer service prevents chargebacks

Delivering excellent, proactive customer service can be the best way to prevent chargebacks from happening. If a disgruntled customer complains to you that they feel like they haven't gotten their money's worth from your service, it's always a better outcome to give them a refund and see them on their way than it is to stonewall them until they demand satisfaction from their bank.

In order for that to happen, however, the customer has to be able to connect with your customer service.

Make sure you clearly display customer service contact information on your website or in a visible part of your app.

Ideally, customer service should be available 24/7, and the more methods of contact you offer, the better. Giving customers the ability to chat with a customer service representative directly through your app or website can be a great way to make sure anyone with a problem comes to you first.

Just remember, if a chargeback is already in progress, you don't want to initiate a refund at that point. Doing so risks creating a double refund.

Use chargeback alerts

The truth is that many of your customers won't make any attempt to contact customer service before bringing the issue to their bank. When that happens, chargeback alerts and tools like Order Insight can be a huge benefit.

Chargeback alert providers have networks of issuing banks that support their services. When a customer disputes a charge with a participating bank, the bank notifies the alert provider, who notifies the merchant. The dispute is put on hold for a short time to give the merchant time to make a decision. When the alert arrives, you have a choice: do you refund the money or let the chargeback go through and fight it afterward?

If the customer is a victim of fraud, the purchase was unintentional, or the problem was merchant error, then a refund could keep that customer happily using your app. More importantly, it will prevent a chargeback, which means your chargeback ratio won't increase.

Tools like Order Insight can help prevent illegitimate chargebacks by providing banks with more detailed information about the transaction, potentially disproving the cardholder's claims and preventing a chargeback before it even happens. Order Insight can also prevent chargebacks by issuing immediate refunds, but this must be done automatically based on rules set up by the merchant. Unlike a chargeback alert, Order Insight can't pause the dispute process and give the merchant time to look things over.

Document transactions thoroughly

When it comes to fighting chargebacks, evidence is key, so you have to prepare ahead of time. That means carefully verifying customer information, making sure you've communicated your terms and conditions to them, and thoroughly documenting everything.

The first step to fighting chargebacks is to make sure the cardholder can't plausibly claim that somebody else used their card.

Turn on AVS/CVV matching in your payment gateway and don't process any transaction that contains a mismatch. Never complete any transaction where the authorization request was declined.

It's also wise to use integrated fraud monitoring tools like Sift to provide a more complete defense against transactions that are actually fraudulent.

Some merchants may be able to obtain additional protection by obtaining signed agreements with valid proof of ID from their customers, but this may be more feasible for serious matchmaking sites than it is for casual dating apps. You should at the very least require all customers to acknowledge your cancellation policy by clicking an "I accept" button during the checkout process.

You should also make sure to use clear merchant descriptors on billing statements (include the name of your app or site and a phone number or email address for customer service) to avoid any chargebacks resulting from confusion over unrecognized transactions.

Always save service logs and member access logs in case you need to reference them in the future (for instance, to prove that a customer was using your service during a disputed billing cycle).

Chargeback representment evidence

Once you've made certain you have sufficient documentation, you need to know what evidence to actually provide. While each case will have different criteria for what counts as compelling, relevant evidence, the following list should cover a wide range of chargebacks:

• Transaction receipt copy showing AVS/CVV match
• Order confirmation email
• Copy of signed agreement with customer
• Copy of customer ID
• Activity or access logs with date, timestamp, and customer IP address
• Email correspondence with customer (welcome email, login credentials, etc.)
• Text of checkout page, terms and conditions, refund and cancellation policy

Any chargeback based on false premises can be beaten and reversed with the right evidence. Clear communication, thorough documentation, and meticulous record keeping can go a long way toward protecting you from invalid disputes.

FAQ

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