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Amazon buyer chargebacks - keep that buyer happy!

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  • Amazon buyer chargebacks - keep that buyer happy!

    A chargeback is where a buyer initiates a dispute with his credit card company. Amazon buyers are not supposed to do chargebacks - they are supposed to work within the framework of Amazon's buyer protection policies, which are pretty good for buyers anyway:
    Amazon return / exchange policy - the best in the business for buyers - Free EBAY, PayPal, Business and Law Forums - Ebay Suspension, PayPal Limited

    But where a buyer is unable or unwilling to get satisfaction through Amazon's internal protection policies, he may dispute the charge with his credit card bank. This is called a chargeback.

    At Amazon there are basically two kinds of chargebacks:

    1) Buyer claims the charge was unauthorized (fraud).
    Fortunately for you, the seller, Amazon COVERS you in these types of chargebacks. Amazon does its own fraud analysis on every transaction and buyer account, so if a fraudulent transaction slips through, you the seller are good to go with no worries - Amazon will eat the loss.

    2) Buyer does not dispute making the transaction, but claims some issue with it.
    Here it gets tricky. First of all, you had better have proof that you shipped the item to the customer. If the customer claims non-receipt, regardless of value, unless you have signature confirmation, you may lose this one. Of course, it becomes a BUSINESS issue whether to use signature confirmation on every item. PayPal has raised the threshold on signature requirement for goods to US $750. or the equivalent in foreign currency:
    but most credit card processors want you to get a signature on over $250. shipments.
    Again, this signature protects you only in claims of non-receipt.
    Business wise, it is probably not worth it to get a signature for items valued under $250., and especially not for items valued under $100. Ship enough low value items with signature confirmation, and pretty soon that extra cost of a couple dollars per item eats up the benefit of being able to dispute the rare "non-receipt" claim.

    Typically chargebacks are not over non-receipt, but "quality" issues of the goods. I put the word quality in quotes because often the product has no intrinsic quality issues, but it is a simply a subjective matter of the buyer being unhappy with his purchase and wanting to return it.

    Because Amazon almost always sides with the buyer on quality issues, if you are faced with a chargeback (or any sort of buyer claim based on quality issues), my advice is to go ahead and accept the return, because if you delay for too long, the buyer may end up with a refund, and the product!
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