Chargebacks?

  1. 3 months ago

    Just this year one of my apps has found some popularity among european users. I thought that was good until I started getting chargebacks. about 20% of the sales i got from europe have ended in a chargeback and i not only lose the $20 for the s/w sale, but I'm also charged $20 for each chargeback. So i'm basically losing 40% of my profit due to chargebacks. I was originally using Digital River (Share-IT) since i could provide immediate download/registration, but tried switching that app to PayPal and doing it manually. Still getting chargebacks, though. Hard to believe someone can claim they didn't authorize a purchase when the sale came via their email address and the download/registration was only sent to that address. I even attachedd a copy of the email to them with their registration to the PayPal Resolution Center. I'm switching that app to the MAS now to see if they're any better. I know Kagi went out of business due to chargeback fees and i'm not nearly as big as they were. Anyone have any experience dealing with chargebacks positively? very frustrating.

  2. @Patrick B — Do you provide a free testing version?

  3. yes. that version cannot be registered, though. once they buy it they get the version that can be registered. all I can do when they do a chargeback is to write their username out of the s/w, so if they update ever, it will deny them access, and i do send them update notices.

  4. @Patrick B — Just FYI, EU citizens do not need to say that they have not authorized a purchase because any purchase online (with some exceptions, of course) can freely be cancelled within 14 days for no reason at all, i.e. a "cooling-off" period.

    However, being located outside of the EU, EU consumers' rights may not apply but you need a provider which will do what **you** want.

  5. Christian S

    Aug 26 Pre-Release Testers, Xojo Pro, XDC Speakers, Third Party Store Germany

    $20 fee for a chargeback is a lot.

    Maybe price the app a bit higher?

  6. Beatrix W

    Aug 26 Pre-Release Testers, Third Party Store Europe (Germany)

    Have you asked your customers why they want the software refunded?

  7. I never seem to get a reply from customers. I suspect some may just want a freebie and others may not recognize the charge on their credit card statement since it doesn't come directly thru my company but thru Digital River and PayPal.

    If I price the app higher, it will still be refunded entirely + the $20 fee. It would only offset the losses somewhat by making others who don't request a refund pay more.

    I just wish if they wanted a refund they'd ask me for one and give me a reason, not claim it was a fraudulent charge. Then I'm left incurring the $20 fee.

  8. Christian S

    Aug 26 Pre-Release Testers, Xojo Pro, XDC Speakers, Third Party Store Germany

    Maybe you could state back on the emails they get and on the website, that you have a Refund form.

    Also with Digital River you can define a short string to go on the CC receipt. I think it's "MBS Germany" for us.

  9. @Patrick B — I have just looked up for your softwares on the MAS and, to be honest, I think they are extremely high-priced for a european audience. Remember that European wages are lower than US wages and I really don't think those prices are sustainable.

    I mean, if I had to pay that much for a software, it needs to be perfect. A single glitch would push me to cancel my purchase.

  10. Hal G

    Aug 26 Pre-Release Testers, Xojo Pro, XDC Speakers CampSoftware.com

    While this won't help to stop the chargebacks, you can take the software back by unregistering them.

    Add a web page to your website, maybe the product page as an html comment, and include a list of the usernames or email addresses to unregister. Then add a timer to your app to run every x hours and on registration to see if the user is on the list. If they are on the list, remove their registration information, show a dialog that suggests they contact you, then quit the app. They could simply relaunch the app to use it in demo mode.

    The key is to not punish your users.

  11. That might work, but I thought "phoning home" was frowned on? Or maybe it isn't anymore since Adobe and many others have gone to the cloud with their apps. Might be worth a shot. Would save me from having to send out updates and hoping they download them to get locked out. I'd have to make sure they have an internet connection I suppose, and if so, poll the list.

  12. I think, though, that it would have to write a marker on a preferences file or something that says it was denied so if they just disconnect their internet connection it would still prevent the s/w from working. Or maybe that's just enough of a hassle that they'd want to repurchase, I don't know.

  13. Thomas E

    Aug 26 Pre-Release Testers

    @Hal G include a list of the usernames or email addresses to unregister

    Just No! Call home and get a reply for the requested email-address, only!
    Do not publish a list of Names on the internet. We have already too much data in the wild :(

  14. Christian S

    Aug 26 Pre-Release Testers, Xojo Pro, XDC Speakers, Third Party Store Germany

    And please use hashed email with a good salt.

  15. it would probably just be a text file online in a no-robots folder. all i'd need are names with no other association, ie, no emails or such. they would have to email me if they wanted access again. would that be kosher?

  16. Hal G

    Aug 26 Pre-Release Testers, Xojo Pro, XDC Speakers CampSoftware.com

    Good point on not publishing the info in the clear. Like Christian said, hash the data.

    In addition, you could also include metadata about the app like the current version number and recent changes. So as you look to see if a user is on the naughty list, you could let the user know if a new version is available. :)

  17. @Patrick B — Yes "phoning home" is a poor solution, and easily worked around on the Macintosh. I wish the available platforms would truly implement a good way to handle that... I mean good for both the developer and the customer.

  18. Edited 3 months ago

    i could use their serial numbers instead since it just hashes the names anyway. someone would need to use the name with the serial number to activate it.

  19. James D

    Aug 26 Pre-Release Testers, Xojo Pro Europe (Switzerland)

    @Patrick B That might work, but I thought "phoning home" was frowned on?

    It’s what you do when you phone home that could be an issue. If all you are going is renewing some kind of license key say once a month or so it should not be an issue.

  20. Tim P

    Aug 26 Pre-Release Testers Rochester, NY

    @Patrick B i could use their serial numbers instead since it just hashes the names anyway. someone would need to use the name with the serial number to activate it.

    This is a far better idea.

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