Dropshipping Chargeback Prevention

Dropshipping companies face more chargebacks than nearly all other industries. If you’re familiar with dropshipping, that likely wouldn’t be a major shock. You’ve come to the right place if you’re a dropshipping company dealing with your fair share of chargebacks or simply looking to escape chargebacks.

At CB-ALERT, we help dropshipping merchants drastically chargebacks and put measures in place to avoid chargebacks down the line.

Key Takeaways

  • Dropshipping chargebacks occur when customers dispute payments for products purchased through a dropshipping merchant.
  • Defective or damaged products, shipping delays, or non-delivery of the product can cause chargebacks.
  • The dropshipping industry is notorious for having poor chargeback ratios.

What Is A Dropshipping Chargeback?

A dropshipping chargeback occurs when you dispute a payment for a product purchased through a merchant. This dispute ultimately results in a refund being issued to you as the customer. Chargebacks can happen for various reasons, such as receiving a defective or damaged product, experiencing shipping delays, or not receiving the product at all. 

*Chargebacks typically occur in the dropshipping industry due to the lack of customer support.


At CB-ALERT, we make applying for your chargeback management services a breeze. We will need the following information to expedite the application process:

  • 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

Why Are Dropshipping Chargebacks So Expensive?

Dropshipping chargebacks can be significantly costly for merchants due to the financial impact on their business. When a chargeback occurs, merchants lose revenue from the original sale and incur additional fees and penalties. Chargeback fees can range from $20 to $100 per occurrence, and when multiplied by multiple chargebacks, they can quickly add up. Moreover, chargebacks can result in the loss of the merchant’s account, leading to a loss of future business opportunities and potential customers. 

In addition to the direct financial impact, chargebacks also require merchants to invest time and resources in disputing them, diverting their attention away from other important aspects of their business. Therefore, the combination of lost revenue, fees, penalties, and the overall disruption to operations makes dropshipping chargebacks an expensive problem for merchants.

Preventing Chargebacks

To mitigate the substantial costs associated with property management chargebacks, as discussed previously, we recommend the following:

  1. Deploy Advanced Fraud Prevention Tools: Incorporate robust tools such as 3DS2 authentication, RDR, and Ethoca/Verifi alerts.
  2. Ensure Recognizable Merchant Descriptor: Guarantee that your company’s descriptor name aligns with your online storefront name, facilitating easy customer recognition.
  3. Collaborate with CB-ALERT: Partner with CB-ALERT to proactively identify and prevent potential fraudsters before chargebacks occur, enhancing your overall risk management strategy.
  4. Clearly Communicate Transaction Details: To enhance customer understanding ensure transparent communication of transaction details, including the purchase price and associated fees.
  5. Consider Refunds as a Preventive Measure: Refunding is often a cost-effective alternative to navigating the complexities of chargebacks. It also increases the likelihood of retaining the customer.
  6. Provide 24/7 Customer Service: Offering round-the-clock customer support is pivotal in countering chargebacks. This accessibility allows for timely issue resolution, refunds, or dispute resolution before customers involve their banks.
  7. Utilize Clear and Concise Billing Descriptors: Guarantee that the billing descriptor on customers’ credit card statements is clear and easy to comprehend, minimizing the risk of chargebacks stemming from confusion.
  8. Maintain Accurate Records: Keep meticulous records of all transactions.
  9. Monitor and Promptly Address Chargebacks: Leverage chargeback alert systems to stay alert regarding disputes and address them promptly, preventing further escalation.
  10. Scrutinize Irregular Orders: Questioning irregular orders is crucial when preventing chargebacks.

Do You Need Chargeback Prevention Alerts?

If your business struggles with chargebacks, we highly recommend using a chargeback management service and implementing chargeback prevention alerts.


If you run a dropshipping business, you know that chargebacks and friendly fraud can ruin a company’s finances quickly. 

If you partner with CB-ALERT, we can do the heavy lifting and free up the valuable time you spent fighting chargebacks so that you can manage your time and continue to grow.

We have two decades of experience in the space with an emphasis on medical ventures, and we know we can become a vital piece to the puzzle.

Below are some of the things we bring to the table at CB-ALERT:

  • Ethoca and Verifi alerts
  • 24/7 customer service
  • Transparent pricing
  • RDR
  • Visa compelling evidence 3.0
  • Gateway/CRM agnostic approach

Ready to stamp out fraud before it begins? Fill out the application below.

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