If you run an adult content business, you likely have had your fair share of adult chargebacks. While managing these disputes can be challenging, reducing your chargeback ratio to achieve the lowest processing fees possible is possible.
The adult industry faces more chargebacks than most other industries for several reasons. First, most adult content websites use subscription billing; nearly all purchases are card-not-present. These are two recipes to cook up disputes quickly.
You’ve come to the right place if you’re dealing with chargebacks in the adult space. With over two decades of experience in credit card processing and dispute management, CB-ALERT has you covered.
What Are Adult Chargebacks And What Makes Them Bad For Business?
Adult chargebacks occur when an angry customer directly contacts their bank rather than the merchant and demands a refund.
The merchant is also hit with a chargeback fee outside of having to refund the customer/bank. Chargebacks are rampant in the adult industry for many reasons.
Example: A spouse finds a purchase to an adult website on their credit card processing statement and confronts their partner. The partner claims they didn’t make the purchase and calls the bank to state their case and ask for a refund.
The bank will then investigate the issue with the merchant and decide whether or not the claim is legit.
Note* Once it gets to this phase, it is challenging to win the dispute, but it’s still possible.
Why Do Adult Chargebacks Occur?
The main reasons for these types of chargebacks are as follows:
- Dishonest affiliate offers in which the affiliate is knowingly trying to trick the customer into a subscription
- Customer service – Lousy customer service is usually one of the biggest culprits in the adult industry
- Unclear subscription offerings: Customers may claim that the offering duped them if the terms are clear and concise.
- Shady free trials: Adult content often runs free trials that turn into subscriptions. These need to be looked at closely to ensure they are clear and concise.
Adult Chargeback Prevention.
Here are some common steps all adult merchants should take to mitigate chargebacks.
- Use robust fraud prevention tools: Implementing tools such as 3DS2 authentication, RDR, and chargeback alerts.
- Use a merchant descriptor: You are making your company more recognizable on a statement by using an accurate merchant descriptor. This descriptor should be clear as possible to prevent confusion.
- Partner with CB-ALERT: At CB-ALERT, we specialize in helping adult merchants stamp out fraudsters before it even begins.
- Communicate transaction details: Make sure your customers understand exactly what they purchase, including the price and associated fees and whether or not it’s recurring.
- Provide excellent customer service: Respond promptly to customer inquiries and resolve issues promptly and satisfactorily. This can help to prevent chargebacks due to customer dissatisfaction.
- Issue a refund: In almost every case, a refund will cost you less than a chargeback. Refunds also give you a better chance of bringing the customer back.
- Use clear and concise billing descriptors: Make sure that the descriptor on your customer’s credit card statement is clear and easy to understand so that they are less likely to initiate a chargeback due to confusion.
- Keep accurate records: Maintain detailed records of all transactions, including customer contact information, order details, and any communication with the customer. This can be helpful in the event of a chargeback dispute. Having proof of any customer purchases can strengthen your case in the dispute.
- Monitor and address chargebacks: Use chargeback alert systems to monitor for chargebacks and address them promptly. This can help to prevent chargebacks from becoming a more significant problem.
- Scrutinize Irregular Orders: If you notice an order come in from another country that you typically don’t see or if the amount is far more significant than usual, look into it to ensure it’s accurate.
Chargeback Alerts To Reduce Disputes/Fraud
Our chargeback alert management can help merchants reduce chargebacks by providing them with any potential chargeback disputes while in the pre-dispute phase.
When the customer initiates a chargeback, the merchant is notified immediately and can solve the dispute before it escalates.
Merchants can benefit from our chargeback prevention alerts by taking the following steps:
- Contact the customer to resolve the issue before they contact their bank
- Provide documentation/evidence to dispute the chargeback
- Offer the customer a refund to resolve the issue
Chargeback alerts can help merchants improve their relationships with their customers to develop life-long relationships. Merchants can also analyze data to identify fraud patterns from specific customers.
Apply For Chargeback Management
We make applying for your chargeback management a breeze at CB-ALERT. You will need the following when applying for our services:
- Company name
- Registered business address
- Merchant account descriptor
- Merchant account number issued by your payment processor
- Access to your sales system to provide refunds/resolve alerts for you
Implementing Customer Service To Prevent Chargebacks
All adult content companies need to invest in 24/7 customer service. When customers are unhappy and need assistance, they often reach out to your customer service team. If you have lousy customer service, you will have a hard time with chargebacks.
We always recommend that our clients invest in reliable customer service and direct them to issue refunds when necessary.
How To Calculate Chargebacks
Understanding how to calculate your chargebacks is essential to know you can stay under the threshold.
To calculate the chargeback rate, you can use this formula:
Chargeback Rate = Total monthly chargebacks divided by total monthly transactions.
It’s important to note that your chargeback ratio must be under .9% if you want to achieve the best rates and avoid penalties.
Do Chargeback Mitigation Companies Help With Disputes?
Chargeback mitigation companies can significantly reduce your chargebacks if you’re willing to work with them and take their advice.
Chargeback specialists can help lower chargebacks by providing various services designed to prevent chargebacks from occurring in the first place.
At CB-ALERT, we will work with you to tailor a plan that fits your business needs via RDR, Ethoca alerts, Verifi alerts, or Order Insight.
Why Choose CB-ALERT To Help Stamp Out Adult Industry Fraud?
Adult content businesses can ruin their finances quickly and face legal issues if they let their chargebacks get out of control. At CB-ALERT, we know exactly what to look for when optimizing your website to fight chargebacks.
We also are confident that we can significantly reduce your chargeback ratio.
With over two decades of experience in the adult space, we can help grow your business and be a vital piece of the puzzle. Below are some of the things we bring at CB-ALERT:
- Alerts in real-time Ethoca and Verifi
- 24/7 customer service
- Transparent pricing
- Gateway/CRM agnostic
- Order Insight
Fill out the application below to find out how we can help your business.