What is a Chargeback?

A chargeback occurs when a customer disputes a transaction with their bank or credit card company, requesting a reversal of the payment. For creators selling digital products, chargebacks can result in lost revenue, additional fees, and potential account issues.

How Chargebacks Work

Customer Disputes: Buyer contacts their bank claiming the charge is unauthorized or product not delivered
Bank Investigation: The bank initiates an investigation and temporarily reverses the charge
Creator Notification: You receive notice of the dispute with a deadline to respond
Evidence Submission: You provide documentation proving the transaction was legitimate
Resolution: The bank decides in favor of either the customer or creator

Common Chargeback Reasons

Friendly Fraud: Customer forgot the purchase or wants a free refund
True Fraud: Stolen credit card used for purchase
Product Issues: Customer claims product wasn't delivered or as described
Subscription Confusion: Customer forgot about recurring billing
Family Purchases: Unauthorized purchase by family member

Prevention Strategies

Use clear billing descriptors customers will recognize
Send immediate purchase confirmation emails
Provide easy access to products after purchase
Offer responsive customer support for issues
Have a clear and fair refund policy
Send renewal reminders before subscription charges

Disputing Chargebacks

When you receive a chargeback, gather:

Order confirmation and receipt
Delivery proof (download logs, email confirmations)
Customer communication history
Terms of service and refund policy the customer agreed to
IP address and device information

Impact on Creators

Loss of sale amount plus chargeback fees ($15-100)
Too many chargebacks can result in account termination
Merchant of record platforms often handle disputes for you
High chargeback rates affect your payment processing eligibility

Chargeback