How likely is it that customers will pay after a chargeback?

This varies greatly. For high-quality products, the likelihood is over 90%, while for unpopular products that frustrate customers, it is 0%.

How does the customer get the opportunity to repay?

The customer receives a payment request via email with a link, through which they have the opportunity to settle the outstanding amount.

Why are there occasional chargebacks despite refunds or cancellations?

End customers can initiate a chargeback with their bank within a year. This is something the customer arranges with their bank and is entirely beyond Digistore24's control. The following examples are rare but possible. Therefore, we present them to you for completeness:

Example 1:

The customer cancels a subscription and then initiates one or more chargebacks with their bank. At Digistore24, a cancellation can be received and successfully initiated – this only means that further debits are stopped. However, the customer may still decide to return old debits, even though no further debit occurs.

Example 2:

The customer requests a refund and still initiates one or more chargebacks with their bank. At Digistore24, a refund can be received and successfully initiated (processing time is about ten business days) – this only means that a refund is planned. However, the customer may still decide to return old debits, even though no further debit and even a refund have occurred. In this case, we file a fraud report and take action against the customer. Here, too, a chargeback fee has been incurred.

How does Digistore24 protect me from customer payment defaults?

Digistore24 ensures your security and reduces the rate of payment defaults through the following measures:

Protection through credit checks

Digistore24 collaborates with Creditpass to protect you from potential payment defaults. This protection is already included in the basic price.

Before a payment is processed, a central database checks whether the customer has already been negatively flagged in their bank transactions. This database is linked to the Schufa and various financial institutions. If the customer is on a blacklist, the payment is declined to protect vendors from potential chargeback fees.

To prevent access to the product in case of a failed payment, Digistore24 has an API interface that communicates with the membership software.

You can access the interface here: https://www.digistore24.com/extern/test/ipn

If there are still payment defaults by customers, Digistore24 sends emails to these customers, urging them to settle the outstanding invoices.

Digistore24 internal blacklist

At Digistore24, we also have a blacklist where we record people and their data who are no longer desired as customers. These individuals are excluded from further purchases at Digistore24. The recording of such customers on the blacklist is done both manually and automatically. Customers are automatically recorded if they have frequently been flagged for chargebacks or refunds.

There is no selective unlocking of blacklist customers for payment methods like PayPal and credit card or other payment methods, as we do not want to create a collection point for customers with complication potential.

Note
Customers remain on the blacklist if their ratio of payments to chargebacks is 50:50.  

How can I proceed with outstanding payments/chargebacks?

As mentioned before, most cases involve a misunderstanding or an error on the customer's part, not an actual attempt at fraud. For example, if you receive a chargeback, it is most often due to incorrect account information or insufficient funds in the customer's account.

Nevertheless, chargebacks are particularly annoying as they incur costs for you. If an end customer initiates a chargeback (whether intentionally or not), a fee is due, which the recipient bank should pay - and thus usually falls back on you.

Given that most cases can be resolved quickly and there is no intentional deception, it is always advisable to first seek dialogue with the customer.

If that does not work, you have the following options: automatic reminder procedures