By now, you probably know that you should never run WooCommerce with a single payment gateway. We’ve already seen in the “PayPal or Stripe?” article that (spoiler alert!), the best solution is “PayPal AND Stripe”. Which means you need to understand that different customers prefer different kinds of payment methods (and this could increase your conversion rate dramatically).
Now we move to the next step: the chargebacks issue, and the risk of having your payment gateways banned by their providers.
A user recently told us that he has a WooCommerce subscription-based business, which is great. The problem is that sometimes customers don’t read that part and think they’re making a one-time purchase. And sometimes, when they realize they purchased something different than what they had in mind, they ask their bank or credit card company to issue a chargeback.
The Stripe website explains it like this:
A chargeback happens when a cardholder makes a claim to their bank or credit card company that a payment made on their card was fraudulent. When a chargeback occurs, the business to which the payment was originally made is required to repay the full purchase amount, plus a chargeback fee.
While you can really do your best to avoid chargebacks by being transparent on your website and order receipts, sometimes – especially for WooCommerce Subscriptions – that’s not enough. Investors say: “Don’t Put All Your Eggs in One Basket” and the same applies here: you’d better record your active subscriptions under PayPal, Stripe, Authorize, and so on, so that all your recurring revenue is not in the same account.
From chargebacks to banned account
We already said that chargebacks might bring your payment provider to ban your Stripe / PayPal / etc. account. Here are two case studies:
a) If you have legitimate customers and you receive over 1% of chargeback rate, your payment provider could close your account because you’ll be suspicious of having a fraudulent business. Therefore, all your subscriptions will be lost.
b) If a spammer / hacker makes a lot of purchases on your WooCommerce store with stolen credit cards, you might be on the hook for a lot of chargebacks. Yet again, your account could be banned/closed.
Unfortunately, we could talk about chargebacks and banned accounts for hours… so let’s find a solution that could decrease the chargeback rate instead.
Rotating payment methods (with 1 click)
The solution for avoiding chargebacks or having your account disabled is to rotate your payment methods to split the risk between multiple payment methods.
For example, you’ll take credit cards with Stripe for order 1, then Authorize.net for order 2, PayPal for order 3, and so on. That cycle will be repeated in a loop. If something bad happens, you won’t lose all your subscriptions, just a fraction of them.
If you search for a PHP snippet you won’t find a solution. But thankfully, there’s a plugin for that – and you can enable the “rotate payment methods” option with just one click.
This useful setting is just one of the features of the Conditional Payment Methods plugin, which allows you to conditionally enable/disable payment gateways based on shipping rates, user roles, order totals, and more. For example, you can enable credit cards and disable PayPal for high ticket products, enable cash on delivery method for local addresses only, enable bank transfer just for manual invoices, and so on.
Back to the rotating feature, after installing and activating the plugin, tick the “Rotate all payment methods per order” checkbox, click on Save changes and that’s it.
Now your payment methods will be rotated and conditionally shown to customers. In one click, the risk of having your account disabled can be reduced. Ready to give it a go?