Got a surprise for you: it’s possible and happens every day. As a business you have a duty to accurately describe your product/service. If you’ve mislead your customer, intentionally or not, they are due their money back.
Using CVV is certainly recommended as a means of reducing some of your risk on transactions.
Using a Cardholder Authentication service like Verified By Visa, etc. will provide an even greater protection against the top 60% of the reason codes given on chargeback attempts.
By performing automated (or manual) phone verifications on your orders - which is now available at a very minimal cost through several providers, and by performing IP/GEO/BIN-matching and/or utilizing a negative database system, you can screen out 80% of the bad orders that you might otherwise receive.
But that being said - there is no “chargeback protection” against faulty merchandise, non-delivery of merchandise or service - or “not as described.”
If you provide a valuable product or service, the expectations are clearly set and your customers are kept happy… then you’ll be able to avoid chargebacks related to the above reason codes.
In fact, it is for this very reason that most merchant processors will no longer approve companies that sell “gimmicky” impulse-sale type products which are subject to a very high return or chargeback rate.
And in answer to an earlier question posted here, YES - it is definitely better to issue a credit return vs. having a customer charge back a sale.
But that being said - there is no “chargeback protection” against faulty merchandise, non-delivery of merchandise or service - or “not as described.”
That is, if you don’t count providing good quality of product and service as chargeback protection. 
Good point, on that. 
no question that i have to describe everything exactly etc.
And if i did and the customer wants a chargeback done by the card company how does the company know who’s right or wrong?
Or do they generally say the customer is always right?
At least here in Germany it doesn’t seem to be that simple to do a chargeback.
First the money be charge again, but after a hearing if you can provide the order and prove shipping you’ll get the money back again.
If you, as a customer, are not happy with what you get, that’s subject of private (civil) law (assuming it’s no obvious fraud).
In the US, in case of doubt, the customer is correct. Sucks if you’re the business but consumers drive the market so they get the tie-breaker. 
Otherwise, your post was great, though. Kudos.
Yeah, and obviously makes the door wide open for all sort of mumbo jumbo…
Fortunately, abuse from chargebacks isn’t too bad. But it isn’t hard to imagine what could happen if it became the favorite way for consumers to get refunds.
so if a person subscribed to something like Classmates.com could they turn around and request a refund/chargeback from the credit card company? Maybe that is why a subscripton to classmates is so expensive…to pay for all the people who do chargeback.
Subscriptions are ok as long as they are not for periods of longer then 30 days. Visa and MasterCard do not allow for advanced sales (in other words, you must deliver your goods and/or services in their entirety within 30 days of the credit card being charged). If a disputed sale is determined to be an advanced sale, and subscriptions over 30 days are an advannced sale, the merchant automatically loses the chargeback. Too many advanced sales and/or chargebacks mean no more merchant account. (FYI, many many many merchants break this rule and it only becomes a problem if you start to receive a lot of chargebacks. That’s the only way it will come to the attention fo the processing bank).
However, you are allowed to charge memberships and subscriptions in 30 increments.
Actually - the maximum length on a recurring transaction/subscription is more so determined by the risk management & underwriting criteria of the merchant processor that you have your merchant account with.
Specifically, it is not against Visa/MasterCard operating guidelines to charge subscriptions for longer than 30 days - but the issue at hand is that MOST merchant processors do NOT allow their merchants to do this.
So by accepting longer term subscriptions - you MAY be in violation of your merchant account terms & conditions which can give them the right to terminate your account and/or to hold funds until the chargeback liability window expires on those sales.
But this all depends on the terms & conditions set forth by your merchant processor. Some processors allow quarterly & annual payments - many do not.
My suggestion is to always be upfront whenever applying for a merchant account. If a given processor isn’t comfortable with anything beyond 30-days, that is understandable but in such a case, it would be recommended to find a processor that does so that you aren’t left in a lurch or terminated if you really do need to accept quarterly or annual payments.
Now, there are indeed some guidelines pertaining to a 30-day period when you are talking about installment billings & tangible merchandise -the full details of which are listed in Section 5 of the Visa Operating Regulations as well as mentioned in a few other places.
My guess is that you referring to the above in which case you are absolulely correct - but those specific guidelines do not encompass the type of recurring transactions done by most Web hosts & subscription service providers.
do you know of anyplace that has 30 day or less subscriptions? Hardly sounds feasible to me.
You can have a subscription/membership for one year and bill it monthly. That is acceptable.
You can also process quarterly & annual payments - but only if your merchant processor allows these kinds of recurring billing cycles.
Thanks for all the information. It really gives me food-for-thought. I have no idea how I am going to administer a measly $3/year subscription.
Hmm, at $3/year that doesn’t leave you much margin after deducting the per transactional costs associated with it.
Is there any way that you could charge a higher price, perhaps on a monthly billing structure, for better cashflow?
I don’t think I could swing that but I have given it thought. I have worked out all kinds of pricing and billing scenarios while factoring in number of subcribers… It seems that most people don’t want to be billed monthly and I don’t think I could charge much more than $3/year. I’ll keep thinking. I might try $7 for two years.
How much do you think the per transactional costs would range?
Thanks again.
Well - to start with, I don’t know of any merchant processor who would underwrite a 2-year subscription. Even a 1-year subscription is difficult to approve in many cases.
On the per transaction side, you would easily be look at $0.30 - $0.40 on a $3.00 item. And that isn’t taking into account any monthly fees involved with having an actual merchant account.
Unless you think you will be doing a large amount of volume, it seems to me that something like PayPal might be the best match for what you are trying to do.
Would you have any idea how companies like classmate.com, magazine subscriptions, and some software licenses can be sold for multiple years?
Just wondering. Thanks.