Evidence Gathering Strategies for Physical Subscriptions

Sydney VaccaroSubscriptionLeave a Comment

Evidence Gathering Strategies for Physical Subscriptions
Subscription billing can be a wonderful way for merchants and customers to experience a frictionless checkout. The same thing that makes subscription billing great can also cause disputes.

If you're a merchant that sells physical goods on subscription billing model, this blog post is for you. We will go through some of the specific evidence required by the card networks for subscription physical good disputes and where to find it.

Creating a Dispute Response for Recurring Billing Disputes on Physical Goods

Depending on the card network, reason code, and transaction modifier, the evidence needed in a dispute response will change. For recurring billing disputes, there is specific evidence that is required by the card network. Below are the more specialized evidence that physical good subscription merchant may need to supply.

Remember, not every piece of evidence will be required by every card network or for every reason code. If you need help drafting responses or knowing what you should put into each response you can check out our customizable response templates for help.

Proof of a Legally Binding Contract

When a customer agrees to subscription or continuous billing they need to enter a legally-binding contract in which they agree to the recurring charges. Now a legally-binding contract may sound intense, but you are showing where and how the customer agreed to the recurring billing.

This Evidence Should be Included

Where to Find / How to Show This Evidence

An excerpt or highlight the relevant portions of the agreement the customer made, and include a link (if possible) to the full agreement.

To show the agreement the customer made you will need to find the terms and conditions they agreed to. These terms and condition will most likely live at the checkout process where you can add a link to your response. You may also want to check your company’s documentation to find them.

Details on how customers indicate their agreement to the contract terms.

To show how the customer agreed to the terms, you could include screenshots of the checkbox clicked upon checkout. You can use screenshots to show whatever process your company uses to get the customer to agree to the recurring billing process.

If the customer claims they canceled the automatic payment prior to being charged, provide evidence in the contract that makes clear that the disputed payment couldn’t have been avoided by cancellation on that date.

To show that the cancellation couldn’t have happened, you will need to look through the terms and conditions the customer agreed to.

For example, if they agreed that the service must be canceled 15 days before the next shipment and then failed to do so. You must provide where in your terms and conditions it states this and show how the customer failed to follow the agreement.

Recurring Contract Dispute Rebuttal

Merchant’s can use recurring contract dispute rebuttal evidence to show how the customer accepted the recurring billing terms. Using the below evidence makes it clear that the customer agreed to the terms and was aware of the cancellation policy.

This Evidence Should be Included

Where to Find / How to Show This Evidence

Documentation that the customer accepted a legally-binding contract.

To show how the customer agreed to the terms you could include screenshots of the checkbox clicked upon checkout. Whatever the process is for your company to get the customer to agree to the recurring billing process.

Clearly lay out key milestones such as:

  • When the customer agreed to the contract.
  • Whether previous payments were made that weren’t disputed.
  • When customer cancelled the recurring payment when that cancellation would go into effect according to the contract.
  • When the disputed payment was made.

To show the above milestones you can:

  • Link or screenshot of the cancellation policy.
  • Have an explanation of your procedures for disclosing the cancellation policy to the customer.
  • Give details explaining how the cardmember did not follow the cancellation policy.
  • Show the date in which the cancellation will go into effect as stipulated in the contract. For example, the service must be canceled by the 5th of the month to stop the upcoming transaction on the 15th. Any cancelation after the 5th will go into effect the following month.

All of this evidence should be found in the merchant’s recurring billing terms and conditions, understanding the checkout process your customer goes through and/or in the cancelation policy documentation.

Cancellation Policy Noncompliance

Inside the terms and conditions or in a separate policy merchants should explain how to cancel their service. In the cancellation policy noncompliance evidence, merchants should show how the customer did not cancel in accordance with the merchant’s policy.

This Evidence Should Include Either

Where to Find / How to Show This Evidence

Proof that the cardholder did not cancel the reservation in accordance with the merchant's published policies.

To show proof that the cardholder did not cancel correctly, you will want to give the relevant highlights or your whole cancelation policy. Then go through and explicitly state how the cardholder did not comply with the policy.

Remember it will be a real person reviewing your dispute response, so make it clear and easy for them to understand how the cardholder did not follow the policy.

Shipping and Delivery

For physical goods, providing the evidence that the shipment was in fact delivered to the customer is important proof.

This Evidence Should be Included

Where to Find / How to Show This Evidence

Any order, shipping, and delivery information that proves that the customer received the shipment.

All the shipment information can be put into one paragraph. Below is an example of how the information can be provided.

  • The customer, Jane Doe, placed order #1234 on October 1st, 2019 and provided the following billing address:
    • 987 Street Name, City, State, 87654.
  • The order was shipped via USPS on October 3rd, 2019 and was issued the tracking number 4567123.
  • The order was shipped to:
    • Jane Doe
    • 987 Street Name, City, State, 87654.

This evidence can be found in the company’s logistics or ecommerce platform records.

Not Finding the Evidence?

If any of the evidence we listed above is nonexistent at your company, make sure to make note of this. The necessary people need to be informed to make a change to the website, check out process, etc. to include this crucial evidence. Without the proper evidence to disprove a cardholder dispute, it will put your company at a large disadvantage to gain any revenue back.

Subscription billing can be a wonderful way for merchants and customers to experience a frictionless checkout. The same thing that makes subscription billing great can also cause disputes.

If you're a merchant that sells physical goods on subscription billing model, this blog post is for you. We will go through some of the specific evidence required by the card networks for subscription physical good disputes and where to find it.

Creating a Dispute Response for Recurring Billing Disputes on Physical Goods

Depending on the card network, reason code, and transaction modifier, the evidence needed in a dispute response will change. For recurring billing disputes, there is specific evidence that is required by the card network. Below are the more specialized evidence that physical good subscription merchant may need to supply.

Remember, not every piece of evidence will be required by every card network or for every reason code. If you need help drafting responses or knowing what you should put into each response you can check out our customizable response templates for help.

Proof of a Legally Binding Contract

When a customer agrees to subscription or continuous billing they need to enter a legally-binding contract in which they agree to the recurring charges. Now a legally-binding contract may sound intense, but you are showing where and how the customer agreed to the recurring billing.

This Evidence Should be Included

Where to Find / How to Show This Evidence

An excerpt or highlight the relevant portions of the agreement the customer made, and include a link (if possible) to the full agreement.

To show the agreement the customer made you will need to find the terms and conditions they agreed to. These terms and condition will most likely live at the checkout process where you can add a link to your response. You may also want to check your company’s documentation to find them.

Details on how customers indicate their agreement to the contract terms.

To show how the customer agreed to the terms, you could include screenshots of the checkbox clicked upon checkout. You can use screenshots to show whatever process your company uses to get the customer to agree to the recurring billing process.

If the customer claims they canceled the automatic payment prior to being charged, provide evidence in the contract that makes clear that the disputed payment couldn’t have been avoided by cancellation on that date.

To show that the cancellation couldn’t have happened, you will need to look through the terms and conditions the customer agreed to.

For example, if they agreed that the service must be canceled 15 days before the next shipment and then failed to do so. You must provide where in your terms and conditions it states this and show how the customer failed to follow the agreement.

Recurring Contract Dispute Rebuttal

Merchant’s can use recurring contract dispute rebuttal evidence to show how the customer accepted the recurring billing terms. Using the below evidence makes it clear that the customer agreed to the terms and was aware of the cancellation policy.

This Evidence Should be Included

Where to Find / How to Show This Evidence

Documentation that the customer accepted a legally-binding contract.

To show how the customer agreed to the terms you could include screenshots of the checkbox clicked upon checkout. Whatever the process is for your company to get the customer to agree to the recurring billing process.

Clearly lay out key milestones such as:

  • When the customer agreed to the contract.
  • Whether previous payments were made that weren’t disputed.
  • When customer cancelled the recurring payment when that cancellation would go into effect according to the contract.
  • When the disputed payment was made.

To show the above milestones you can:

  • Link or screenshot of the cancellation policy.
  • Have an explanation of your procedures for disclosing the cancellation policy to the customer.
  • Give details explaining how the cardmember did not follow the cancellation policy.
  • Show the date in which the cancellation will go into effect as stipulated in the contract. For example, the service must be canceled by the 5th of the month to stop the upcoming transaction on the 15th. Any cancelation after the 5th will go into effect the following month.

All of this evidence should be found in the merchant’s recurring billing terms and conditions, understanding the checkout process your customer goes through and/or in the cancelation policy documentation.

Cancellation Policy Noncompliance

Inside the terms and conditions or in a separate policy merchants should explain how to cancel their service. In the cancellation policy noncompliance evidence, merchants should show how the customer did not cancel in accordance with the merchant’s policy.

This Evidence Should Include Either

Where to Find / How to Show This Evidence

Proof that the cardholder did not cancel the reservation in accordance with the merchant's published policies.

To show proof that the cardholder did not cancel correctly, you will want to give the relevant highlights or your whole cancelation policy. Then go through and explicitly state how the cardholder did not comply with the policy.

Remember it will be a real person reviewing your dispute response, so make it clear and easy for them to understand how the cardholder did not follow the policy.

Shipping and Delivery

For physical goods, providing the evidence that the shipment was in fact delivered to the customer is important proof.

This Evidence Should be Included

Where to Find / How to Show This Evidence

Any order, shipping, and delivery information that proves that the customer received the shipment.

All the shipment information can be put into one paragraph. Below is an example of how the information can be provided.

  • The customer, Jane Doe, placed order #1234 on October 1st, 2019 and provided the following billing address:
    • 987 Street Name, City, State, 87654.
  • The order was shipped via USPS on October 3rd, 2019 and was issued the tracking number 4567123.
  • The order was shipped to:
    • Jane Doe
    • 987 Street Name, City, State, 87654.

This evidence can be found in the company’s logistics or ecommerce platform records.

Not Finding the Evidence?

If any of the evidence we listed above is nonexistent at your company, make sure to make note of this. The necessary people need to be informed to make a change to the website, check out process, etc. to include this crucial evidence. Without the proper evidence to disprove a cardholder dispute, it will put your company at a large disadvantage to gain any revenue back.

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