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Chargeback repeat offender blacklist

Posted by Michael Bloch in ecommerce (Saturday November 14, 2009 )

A free service is available to merchants to blacklist card holders who issue chargebacks without good reason.

Chargebacks are the bane of online merchants and it’s a sad fact that some customers like to issue chargebacks as soon as something isn’t to their liking. Some will threaten a chargeback from the get-go rather than try to work things out with the merchant.

At times, card holders will engage in a transaction with the full intention of charging it back – this despicable practice is called “friendly fraud“.

For ethical merchants, being issued with a chargeback notice is a bit like being found guilty until proven innocent. It’s frustrating and can leave you feeling dirty. If you have taken the usual steps to prevent chargebacks and have effective credit card fraud screening strategies in place; these may not be enough to discourage repeat chargeback offenders.

It doesn’t really matter if the person is absolutely in the wrong, a great deal of time and money is lost in challenging chargebacks and the process is weighted in the customer’s favor.

To make matters worse, the more chargebacks a merchant gets, the greater the risk their transaction fees will be increased and in some cases, may even see their merchant account terminated. Once a merchant account is terminated for reasons of excessive chargebacks, it can be difficult to find another merchant account provider willing to do business, and those that will tend to charge more.

According to, studies show that once a customer has filed a chargeback, they are nine times more likely to do so again, but they are 98% less likely to issue a chargeback if they know they risk being put on a blacklist for doing so.

And that is part of what BadCustomer does – allows merchants to put folks abusing the chargeback system on report and offers a place for merchants to check for customers with dubious chargeback records. According to the site, they have 6,126,202 records currently on file at the time of publishing this post. also offer an API where your payment processing system checks BadCustomer’s records and if a person is on their blacklist, the transaction can be denied automatically and the person be redirected to the site – where they will have to pay to be removed.

The service also offers tools it says will help customers learn the risks of charging back purchases and how to properly handle billing disputes in order to encourage them to deal with merchants directly in resolving billing problems.

Learn more about BadCustomer’s free service here.


Preventing friendly fraud
Guide to merchant accounts
Preventing and challenging chargebacks
Credit card fraud screening strategies
Instigating chargeback disputes


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