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High levels of chargeback/disputes?
I have a client with a single subscription-based product. They say they get a lot of chargebacks/disputes or purchases from prepaid cards. In the past they used BIN-blocking software to try to weed out those conversions with a high probability of being losers. Note, their business model relies on people getting the free trial (paying s&h), and then keeping the subscription going after the trial ends.
They just removed the software, and conversion volumes (completed transactions) are way up…but they’re showing less than 50% are legit. That seems crazy to me, that the client is flagging so many conversions as invalid. Does any of this resonate? Are there so many people using prepaid credit cards and/or immediately disputing charges?
Edit to add; all these conversions are coming from Google Search (no Search Partners), so it shouldn’t be as spammy as some other channels.
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1 Reply
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Sounds like this is one of those tools that auto-renews and charges people without warning.
If they inform people 3 days before the payment that they will charge them, and that if they do not wish to be charged, here is a link to cancel, then the charge backs volume will be reduced drastically.
So it’s their fault not Google Ads’.
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High number of prepaid cards needs unpacking. If they are selling something sketchy then that’s one reason. If it’s they are marketing to a very low end demographic that’s another.
We can’t tell from your post but sounds like maybe it’s something sketchy and therefore people cancel for a good reason ?
Also if they accept PayPal compare PayPal cancellation rate. That is normally higher cause easier to see.
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