opinion

Don’t Fight Chargebacks, Stop Them in Their Tracks

Don’t Fight Chargebacks, Stop Them in Their Tracks

You open your business. You build the best product you can and get some amazing partners. You pick the first merchant processor that pops up on a web search with a good rate. Your sales are rocking. Years later you get hit with chargebacks because a shady client managed to push through dozens of bogus charges. That’s when it matters most which payment processor you chose.

Recent statistics from last year show that fraud accounts for only 30 percent of chargebacks. Upwards of 23 percent of chargebacks are due to the wrong product being shipped or that product not meeting expectations. An additional 26 percent of disputes are a direct result of a product never arriving (or the client claiming it did not). Even though chargebacks are rising by double-digits each year, they continue to cost the average merchant upwards of 1.5 percent of their total revenue. For every $1 million in sales, that cost is $15,000.

It’s not about trying to win a chargeback after it’s already happened (which can be really, really difficult) it’s about providing a better relationship and communications to the merchant.

Several years ago (and some time before we met) this happened to a good friend of mine. I’ll call him Michael (that’s not his name) but he gave me permission to tell you his story. Much like people who buy the cheapest auto insurance, everything is great (and you’re saving a ton of money) until you get in an accident. That’s when you might wish that you had not just better insurance, but that you had chosen a better insurance company.

That friend of mine got slapped with fees for each chargeback. They also paid for thousands of dollars in losses for services that were already provided, so it came out of their revenues. Adding insult to injury, the processor completely terminated service and ended the relationship. This was after several years of processing without any serious issues. All it took was a few big chargebacks from fraudulent purchases for the processor to simply cut and run.

This is not the way any processing company should treat its merchants and it’s certainly not a good way to do business. That merchant was worth millions of dollars a year in revenue. Back then, Michael thought that the issue was that the chargebacks triggered the processor to review them and discovered they were “adult” in nature. In hindsight, that probably wasn’t the core of the issue. The chargebacks most certainly were. Michael was lucky. He didn’t get blacklisted by the credit card companies (you have to do something really bad for that to happen) and he just needed a new processor.

What a merchant really needs is preferably a processor that will not run for the door at the first sign of trouble. Working with a merchant has its struggles, and while some processors may be most interested in doing business with you when it's convenient, it’s better to find a processor who will work with you when it’s not going well. 

The next time, Michael picked an adult processor who had spent a ton of money on sponsorships and they knew his company’s name very well. Things were better when it came to chargebacks and the company did not turn their back on them, not once. The problem the second time was chargebacks were not being avoided, and there was nearly no success in disputes. Communications about when the chargebacks had occurred was not timely and his frustration grew until he started looking for a real solution.

Even if we had known each other back then, I would not have told him “I told ya so” and used my friendship to leverage an active relationship with us. Anyone who knows me and my company knows that it’s just not how we roll. For me, it’s about building relationships organically, and you can’t force people to make the right decision. They have to decide for themselves when they’re ready.

Michael was ready, and we earned his business. So far, there has not been a single chargeback, and perhaps that’s because our chargeback interception solution actually prevents chargebacks from occurring. It puts not just Michael, but every one of our clients ahead of the problem, and keeps them compliant and below the level of chargebacks that will cause problems.

It’s not about trying to win a chargeback after it’s already happened (which can be really, really difficult) it’s about providing a better relationship and communications to the merchant.

Can you fight chargebacks? Definitely! But it can be difficult, expensive and time consuming. We don’t believe in companies that provide arbitration or mitigation services for a fee. We believe in prevention. The secret is out — the fight can be over before it even begins.”

Mia is the founder of MobiusPay, a leading digital payment company that specializes in consulting and processing for high-risk merchants. For more information, visit them on Twitter @MobiusPayments or MobiusPay.com.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

profile

WIA Profile: Lexi Morin

Lexi Morin’s journey into the adult industry began with a Craigslist ad and a leap of faith. In 2011, fresh-faced and ambitious, she was scrolling through job ads on Craigslist when she stumbled upon a listing for an assistant makeup artist.

Women In Adult ·
profile

Still Rocking: The Hun Celebrates 30 Years in the Game

In the ever-changing landscape of adult entertainment, The Hun’s Yellow Pages stands out for its endurance. As one of the internet’s original fixtures, literally nearly as old as the web itself, The Hun has functioned as a living archive for online adult content, quietly maintaining its relevance with an interface that feels more nostalgic than flashy.

Jackie Backman ·
opinion

Digital Desires: AI's Emerging Role in Adult Entertainment

The adult industry has always been ahead of the curve when it comes to embracing new technology. From the early days of dial-up internet and grainy video clips to today’s polished social media platforms and streaming services, our industry has never been afraid to innovate. But now, artificial intelligence (AI) is shaking things up in ways that are exciting but also daunting.

Steve Lightspeed ·
opinion

More Than Money: Why Donating Time Matters for Nonprofits

The adult industry faces constant legal battles, societal stigma and workplace challenges. Fortunately, a number of nonprofit organizations work tirelessly to protect the rights and well-being of adult performers, producers and industry workers. When folks in the industry think about supporting these groups, donating money is naturally the first solution that comes to mind.

Corey D. Silverstein ·
opinion

Consent Guardrails: How to Protect Your Content Platform

The adult industry takes a strong and definite stance against the creation or publication of nonconsensual materials. Adult industry creators, producers, processors, banks and hosts all share a vested interest in ensuring that the recording and publication of sexually explicit content is supported by informed consent.

Lawrence G. Walters ·
opinion

Payment Systems: Facilitator vs. Gateway Explained

Understanding and selecting the right payment platform can be confusing for anyone. Recently, Segpay launched its payment gateway. Since then, we’ve received numerous questions about the difference between a payment facilitator and a payment gateway. Most merchants want to know which type of platform best meets their business needs.

Cathy Beardsley ·
opinion

Reinventing Intimacy: A Look at AI's Implications for Adult Platforms

The adult industry has long revolved around delivering pleasure and entertainment, but now it’s moving into new territory: intimacy, connection and emotional fulfillment. And AI companions are at the forefront of that shift.

Daniel Keating ·
profile

WIA: Sara Edwards on Evolving Clip Culture and Creator Empowerment

Though she works behind the scenes, Sara Edwards has had a front-row seat to the evolution of adult content creation. Having been immersed in the sector since 1995, she has a unique perspective on the industry.

Jackie Backman ·
profile

Segpay Marks 20 Years of High-Risk Triumphs

Payment processors are behind-the-scenes players in the world of ecommerce, yet their role is critical. Ensuring secure, seamless transactions while navigating a rapidly changing regulatory landscape requires both technological expertise and business acumen.

Jackie Backman ·
opinion

The SCREEN Test: How to Prepare for Federal Age Verification

For those who are counting, there are now 20 enacted state laws in the United States requiring age verification for viewing online adult content, plus numerous proposed laws in the works. This ongoing barrage has been exhausting for many in the adult industry — and it may be about to escalate in the form of a potential new AV law, this time at the federal level.

Corey D. Silverstein ·
Show More