It’s also very common for customers to regret their own excessive in-app purchases and make up false claims to dispute them later. Customers may also fail to recognize microtransaction charges on their bank statement, especially if they show up under the name of the publisher rather than the app itself. When this happens, they may wrongly assume they’ve become victims of fraud and mistakenly attempt to dispute the charges.
What Can Merchants Do to Prevent In-App Purchase Chargebacks?
Proactive communication and reasonable safeguards can help digital merchants minimize the risk of in-app purchase chargebacks.
One of the most effective things you can do is send an immediate purchase notification after each transaction. If the account holder’s family members are making purchases without permission, this can quickly put the brakes on things.
Merchants also have the right to represent and fight friendly fraud chargebacks, and these notifications can serve as proof that the customer was informed about the purchases at the time they were being made.
It’s also very important to use clear billing descriptors so the customer will immediately recognize your charges when they review their bank statement.
To prevent true fraud chargebacks, digital merchants should look for technological solutions to prevent unauthorized account access and restrict suspicious purchases and account transfers. One way to do this is to require users to link their accounts to a validated social media profile. You can also consider limiting purchases until an account has reached a certain age.
When you have to fight an illegitimate chargeback, data can be your best ally. If you can prove that the customer used their own device to make the purchase, downloaded the content, and logged into their account to use it, you will have a very strong case to make to the issuing bank about the validity of the charge. Record and save all relevant data pertaining to purchased content.
There’s no such thing as a good chargeback, but in-app purchase chargebacks can be especially pernicious because they can stack up so quickly. When every chargeback comes with a separate fee and an incremental uptick to your chargeback rate, several $1 chargebacks can be a lot worse than a single chargeback for a much larger dollar amount.
If in-app purchase chargebacks are getting to be an overwhelming problem, it can be helpful to work with chargeback experts who have experience with the strategies needed to deal with microtransactions and digital merchandise disputes. The right chargeback service provider will have the know-how to lower your chargeback rate, fight off friendly fraud, and preserve the integrity of your revenue stream.