Get FREE Training Workshop from John Crestani
John Crestani has been recognized by Forbes, Business Insider, Entepreneur.com, and dozens of other publications for his success online. More importantly, he’s helped thousands of everyday people from around the world create success for themselves as well.
How are chargebacks managed on ClickBank?
Chargebacks on ClickBank are handled similarly to refunds, but they are more serious and involve the payment processor. A chargeback occurs when a customer disputes a charge with their bank or credit card provider, and the bank reverses the transaction, often because the customer claims fraud, dissatisfaction, or unauthorized purchase.
How Chargebacks Are Managed on ClickBank:
1. What Happens When a Chargeback Occurs?
- Customer Disputes a Transaction: If a customer contacts their bank or credit card provider to dispute a charge made through ClickBank, the payment processor initiates a chargeback.
- Chargeback Fee: ClickBank charges a $20 fee to the vendor (the product creator) for each chargeback. This fee is meant to cover the administrative costs associated with handling the chargeback.
- Refund to Customer: If the chargeback is successful, the payment processor will reverse the original payment, and the customer will receive a refund, even if the vendor had not offered one.
2. Impact on Affiliates:
- Commission Reversal: Similar to a refund, when a chargeback occurs, the affiliate who referred the customer will lose the commission they earned from the sale. ClickBank will deduct the amount of the chargeback from the affiliate’s future commission payments.
- Negative Balance: If the chargeback amount exceeds the affiliate’s current earnings, their ClickBank account may go into a negative balance. This means the affiliate will need to earn enough in future commissions to cover the negative balance before receiving additional payouts.
- Chargebacks vs Refunds: While refunds are initiated by the customer and typically processed by ClickBank within 48-72 hours, chargebacks involve the customer’s bank or credit card provider, and the process may take several weeks to resolve.
3. How Chargebacks Affect Vendors:
- Vendor Liability: Vendors are ultimately responsible for chargebacks. While ClickBank processes chargebacks, the vendor is the one who loses the revenue, as the payment is reversed by the bank.
- Chargeback Rate: Vendors should monitor their chargeback rate, as a high chargeback rate can indicate issues with product quality or customer service. If a vendor has excessive chargebacks, ClickBank may suspend or terminate the vendor’s account.
- Preventing Chargebacks: To reduce chargebacks, vendors can offer clear product descriptions, a straightforward refund policy, and excellent customer support. They may also want to work with ClickBank to help prevent fraud (e.g., using fraud protection services).
4. Tracking Chargebacks:
Affiliates can track chargebacks in their ClickBank account under the Reporting section. This will allow them to see which sales have been charged back and understand the financial impact on their commissions.
5. Chargeback Dispute Process:
- Dispute Process: If a vendor believes the chargeback was initiated in error or fraudulently, they can dispute the chargeback with the payment processor. This involves submitting supporting documentation to prove the legitimacy of the transaction.
- Timeframe for Disputing: The vendor has a limited amount of time (usually around 30-45 days) to dispute a chargeback and provide evidence to the payment processor.
Summary of Chargeback Management on ClickBank:
- Chargeback Fee: ClickBank charges vendors a $20 fee per chargeback.
- Commission Reversal: Affiliates lose their earned commissions on chargebacks, and the amount is deducted from future payments.
- Negative Balance: If the chargeback exceeds the affiliate’s balance, their account may go negative.
- Vendors’ Responsibility: Vendors are liable for chargebacks and can face account termination if they have a high chargeback rate.
- Tracking: Affiliates can track chargebacks in the ClickBank Reporting section.
Chargebacks are more impactful than refunds because they involve the payment processor and can lead to additional fees and account penalties. Affiliates and vendors should both take care to minimize chargebacks by offering quality products and clear customer service.
