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I noticed a comment in another thread:

I’m pretty sure they can support this scams attempts, they generate enough revenue to cover this situation without throwing this on authors back. Is also quite envato “fault” because is their store. If a thief enters in your store means you have not enough security. Why is my fault, then?

If Envato get a charge back on an item then should Envato take back the authors commission and the referral fee?

Yes Envato make a lot of money from the sites they have built, yes they run the “system” so should be more secure (will go into that in a sec) but why should Envato be out of pocket, and the author / referrer compensated for someone scamming Envato.

Unfortunately Envato are being held over a barrel by Paypal, anyone who pays via Paypal can go back to their bank (or Paypal) and initiate a chargeback of their payment. The bank will then take the money back from Paypal and then Paypal will remove it from Envato. Paypal can’t / won’t contest the chargebacks due to time taken).

The whole issue here is the banking system, anyone can initiate a chargeback (claiming stolen credit card) with no research from their bank.

Until Envato pulls their fingers out and use a credit card terminal to do payments they have no way to stop chargebacks, I had a client which was getting quite a few when they had paypal on their site, moved them to a CC terminal and they went right down as the terminal provider would contest every chargeback and win almost 95% of them.(items were being sent to the same address as cardholder etc)

The terminal providers do normally charge a fee to contest the chargebacks but it’s much less than you could lose by the scam.

Chargebacks are part of the digital world and until Envato look at an alternative system, authors and affiliates will be affected by them, and Envato shouldn’t have to payout the commissions when it’s the cruddy banking system which makes this possible.

It’s not nice having commission removed but Envato are losing money on these too, and if Envato kept paying the commissions they would lose thousands per month (at a guess).

Are chargebacks common for authors or are they sporadic?