What is a chargeback?
A chargeback is when funds are returned to a credit card owner after they report an incorrect or unwanted transaction on their card to the credit card company.
On Etsy, the credit card company informs Etsy of the chargeback and may also request more information, such as transaction information, proof of delivery, and proof of refund. Etsy must respond to the credit card company with this requested information within a short timeframe.
Why would a chargeback be filed?
- Fraud - This is when the credit card owner reports that they did not make or authorize a transaction. This may happen when a credit card number is used without permission.
- Non-Delivery - This is when a buyer makes a purchase - and that purchase goes through - but the buyer never receives the item or items purchased.
- Not as Described - In this case, a purchase is made, but the buyer receives an item(s) that is different than what was listed on Etsy, or different from what the buyer thought she was purchasing.
- Return - A credit card owner can request a chargeback if they’re not satisfied with the item(s) purchased and received. This could be for a variety of reasons, including damage.
- Dissatisfied - A chargeback can be filed if the buyer is not satisfied with their purchase.
How does a chargeback get filed against me as a seller?
A credit card owner, who may or - in some cases - may not be the buyer, contacts their credit card company and requests a refund for the transaction. The reasoning for the refund could be one or many of the types listed above.
How will I know there's been a chargeback filed against me?
Etsy receives reports of chargebacks from credit card companies and banks which issue credit cards and then investigates the dispute to see if it’s valid. If additional information is required from you to resolve the dispute, you will be contacted at the email address you used to open your Etsy account.
If you are contacted, you’ll have five (5) days to respond. If you don’t respond in the given timeframe, it could result in a refund being issued on your behalf and the potential suspension of your shop. However, if Etsy can resolve the dispute without contacting you, we may do so.
If a refund is necessary, how is it issued?
When a chargeback is filed against a shop, Etsy always conducts a thorough investigation. In most cases, Etsy will ask you, as the seller, to refund the order from your shop. However, Etsy does reserve the right to refund the order on your behalf.
Seller best practices for chargebacks
Although chargebacks cannot always be completely avoided, here are some steps you can take as a seller to help prevent them:
- Provide a reasonable and accurate dispatch date (also referred to as “processing time” or “dispatches-by-date”) using the tools provided by Etsy, and dispatch the order accordingly.
- When you dispatch an order, mark the order as dispatched. You should only mark an order as dispatched when you actually dispatch an order to a buyer.
- Provide valid proof of dispatch with all orders. Also, be sure to provide proof of delivery for items dispatched within the US. Valid proof can include a delivery or tracking number that shows the order route and delivery progress.
- Communicate with the buyer via Etsy Messages about the status of their order, any questions they might have, and any additional details agreed upon in the transaction.
- Rather than encouraging a buyer to file a chargeback with their credit card company, you should use Etsy’s Case system so that you and the buyer can work toward a solution. Etsy is always happy to mediate and assist our community in situations like these. Learn more about how to open a Case on Etsy here.
- Actively participate in the case and respond to all questions posed by both Etsy Admin and the buyer. Cases require the participation of both the buyer and the seller.
- Respond to Etsy’s requests for information. Be sure to respond within the particular time frame given by Etsy.
- Publish your policies for delivery, returns, exchanges, and custom orders on your shop’s Policies page. Also, please be sure that your shop policies are in compliance with Etsy’s site-wide guidelines.
Valid proof of dispatch
Always use a secure delivery method, like Etsy Postage Labels, with tracking and/or delivery confirmation.
If you have attached tracking to an order and it shows attempted delivery to the address on the receipt, we may not contact you at all, and respond to the dispute with the tracking information on your behalf.
If more information is still needed, you will be contacted and will have five (5) days to respond.
Valid proof of dispatch can be, but is not limited to:
- An Etsy Postage Label
- A scanned copy of delivery forms or departure information
- A delivery service receipt or customs form that includes the date of dispatch, as well as the name, full address, or post code of the recipient
- A valid tracking number showing movement to the address listed at the time of the transaction or agreed upon in Etsy Messages