Overview

A chargeback (also known as a dispute) occurs when a cardholder questions a payment with their card issuer; this differs from a refund, which is a voluntary return of funds from the billing entity. A transaction may be disputed for a variety of reasons by a customer, such as unfamiliar or fraudulent charges.

Platform owners are charged a $15 fee for any chargeback initiated on credit/debit card transactions processed by the Vonza Payments. Vonza also provides platform owners the ability to dispute chargebacks on their end, in the case of a misunderstanding or fraud. With this in mind, it’s important to understand how to handle and prevent disputes with your customers to minimize any financial loss.



Preventing Chargebacks

While chargebacks are an unavoidable aspect of taking payments online, a strong prevention strategy is the best way to mitigate chargebacks. We recommend implementing a number of prevention methods, including establishing effective communication and transparency, crafting a clear sales pitch, and adhering to a fair and flexible refund policy.


Establish Transparency & Effective Communication  

Your platform’s refund policies, course content, and any other aspects of the course experience should be presented clearly on the sales page of your course and reinforced across your platform. If you plan on releasing content over time, this information should be clearly stated on your sales page to avoid confusion. Ensure that your platform's email address is current and that all email inboxes associated with your platform are monitored regularly.


Stick to a Flexible Refund Policy

Having an easily understandable refund policy goes a long way; we recommend considering each refund request on a case-by-case basis. If a customer wants to file a chargeback, you can preemptively issue a refund, which will effectively prevent the customer from disputing the transaction and help you avoid chargeback fees.

 

Handling Chargebacks

Customers that file a chargeback are automatically unenrolled from the course they originally purchased. If they purchased a subscription or payment plan, then their active subscription or payment plan will also be automatically canceled.


Vonza will send you email notifications when a chargeback is initiated by a customer on payments processed by Vonza Payments. You will not receive email notifications for chargebacks that are initiated on transactions processed by custom payment gateways (PayPal). To view all disputed transactions, navigate to your transaction history.


In some cases, you'll have the option to dispute the customer chargeback. The process for disputing a chargeback differs depending on the payment gateway that processed the transaction.


CAUTION: The win rate for chargeback disputes is very low. If a dispute is initiated, we cannot guarantee that you will win the dispute. After a dispute is initiated, it can take credit card companies up to 90 days to render a decision and begin the process of returning the funds to the platform owner or customer. The best way to handle chargebacks is to take the prevention steps outlined above to decrease the likelihood of customer chargebacks.


Potential Fraud Warnings (PFW)

If you're using Vonza Payments, platform owners will be notified by email whenever a transaction has a potential fraud warning. Potential fraud warnings are created when a user claims to their bank that a transaction is fraudulent, and occurs before an official chargeback/dispute is created. According to Stripe, the service Vonza uses to process card transactions - "82% of payments that receive PFWs eventually get disputed".