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Florida Businesses Dealing With Payment Disputes


In the world of business, not all sales are final. Payment issues are common. A retailer may sell an item of clothing, only to have the customer return it the next day because it’s not the right size. Or maybe a customer bought a computer, only to find out that it didn’t work.

Returns are common, and many businesses accept them because “the customer is always right.” But chargebacks are a different story.  These are refunds given to a customer, but they are done through the bank rather than by contacting the merchant directly. Chargebacks are especially common in e-commerce businesses, where it can be difficult for a customer to contact the merchant directly.

Chargebacks are beneficial to consumers, but for businesses, they result in a loss of revenue.  On top of the charge being reversed, merchants also have to pay fees ranging from $20-$100. The problem has gotten worse with the COVID-19 pandemic. In the Tampa Bay area, businesses saw a 23% increase in chargebacks just weeks into the quarantine. But why?

Many businesses were forced to shut down or operate on a limited basis. This means businesses had to deal with cancellations, delayed deliveries and logistical challenges like interruptions in the supply chain. Those in the entertainment and travel industries were especially hit hard by the shutdown. Many businesses transitioned to online services, which caused them to become victim to chargebacks.

While many chargebacks are legitimate, many are the result of fraud. A lot of fraud happens in Florida, the top state for fraud reports.  In fact, by 2023, it is predicted that two-thirds of chargebacks will be due to fraud.

Ideally, customers should be contacting merchants before filing a dispute with their bank. However, most don’t because they feel that a chargeback is the same as a return (It’s not.). The merchant often has no say in the matter and often does not even realize the chargeback until it’s too late.

The chargeback system has been around since the 1970s and is in need of an overhaul. Experts say that automation and artificial intelligence can help provide better protection for merchants.

Benefits of Chargebacks to Customers

Chargebacks have many benefits for customers. They help customers feel secure about their money. They make merchants provide high-quality services and products because if customers are not satisfied, they can start the chargeback process. They also keep merchants honest. If the goods were never delivered or the merchant charged for services that were never rendered, then the customer doesn’t have to pay. In addition, some credit card purchases are fraudulent, so if the cardholder finds out, they can quickly recoup their money by filing a chargeback. 

Seek Legal Help

Chargebacks can hurt a company’s bottom line. While many chargebacks are valid, many are the result of fraud.

If you’re dealing with business disputes. Get help from Fort Lauderdale business litigation lawyer Edward J. Jennings, P.A. He has experience resolving a variety of business matters. For effective representation, schedule a consultation. Fill out the online form or call 954-764-4330.




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