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Table of Contents

Lead Story

Getting real about payments

Patti Murphy


Industry Update

EMV liability shift challenged in federal court

TSYS, Ethoca unite against CNP fraud

CFPB fines Dwolla over data security lapses

The high cost of omnichannel retail


Prepare now for tax season 2017

Taking your business to the next level - Part 2

Acquirer Earnings Roundup: March 2016

Mobile bill pay on fast track


POS for all seasons

Dale S. Laszig
DSL Direct LLC

Resolutions + neutraceuticals = chargebacks

Monica Eaton-Cardone
Chargebacks 911


Street SmartsSM:
Notes on the path less traveled

Jeffrey I. Shavitz
TrafficJamming LLC

What to do when a processor stops paying

Adam Atlas
Attorney at Law

Chargebacks, fraud in high-risk merchant accounts

Matt O'Shea
National Bank Services

Company Profile


New Products

Database security, enterprise scale

HexaTier 4.0

Flexible, reliable, secure card reader authenticator

MagTek Inc.


Keep it neat and clean


Readers Speak

Letter from the Editors

Resource Guide


A Bigger Thing

The Green Sheet Online Edition

March 28, 2016  •  Issue 16:03:02

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Resolutions + neutraceuticals = chargebacks

By Monica Eaton-Cardone

Losing weight and getting healthy are the most popular New Year's resolutions. Yet they often result in failure, disillusionment and blame. This typically leads to chargebacks that push some merchants into high-risk status and can cause problems with Visa Inc. and MasterCard Worldwide.

Getting in shape is an admirable goal, and millions of people vow to do this at the beginning of each year. However, instead of eating a healthier diet and getting more exercise, many people try to achieve this goal through "neutraceuticals," which are natural supplements with mostly unsubstantiated benefits, including weight loss and improved health.

According to a Feb. 19, 2016, RF article, the Centers for Disease Control determined that the health benefits of dietary supplements are "unclear." Despite this, dietary supplements have maintained the top ranking among alternative healthcare approaches since 2002 and 2007, the last two times the CDC studied this topic (see

Merchants take the rap

Without adopting lifestyle changes that include regular exercise and realistic, healthy meal plans, people who resolve to turn over a new leaf in January and rely solely on neutraceuticals to do so are usually disappointed by February or March.

And what do they do? They give up. But they don't blame their actions; they blame the merchants who sold them the products and then demand chargebacks from their issuing banks. They do this even though many merchants selling neutraceuticals have return policies that enable dissatisfied customers to return the products for a full refund if they're not satisfied.

As a result, many merchants selling in this industry are labeled "high-risk" by their card processing partners. Sometimes, they are unable to procure merchant services at all.

When a bank processes a chargeback, it automatically assumes the merchant was in the wrong. Then, when the merchant accepts the chargeback without dispute ‒ to keep the peace and keep the company's customer service reputation intact ‒ the bank's impression is affirmed. Repeated chargeback complaints continue to taint the merchant's reputation.

Education, standards needed

Unfortunately, a lack of industry-endorsed standards is a primary barrier to sustainable solutions. My colleagues and I are continually gathering, breaking down and analyzing chargeback data from multiple perspectives. From this, we know things such as the fact that women charge back 400 percent more than men on tangible products, but for digital products, they're about even. We also know which issuers filed the most chargebacks in the diet product markets in the beginning of the year.

This data shows that merchants have little standardization in their chargeback processes and are, for the most part, unequipped to deal with chargeback fraud or even "the customer is always right" bias issuing banks have in favor of consumers. Many retailers aren't even aware of chargeback triggers, which may mistakenly be built into their business policies.

Payment professionals are in a unique position to help merchants slammed with chargebacks by consumers who haven't followed through on their resolutions and blame the products they purchased instead of their own lack of commitment. Working together to educate merchants, banks and the card brands about the problem and finding workable solutions is a worthy, attainable goal.

Monica Eaton-Cardone is Chief Operating Officer and Dispute Remediation Leader at Chargebacks911. She will be speaking at the Money2020 Conference in the Copenhagen on April 4 to 7, 2016, and at the Multichannel Merchant Growing Global Conference in the United States on April 12 to 14. Contact her at

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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