Chargeback Management

What is a Chargeback?

A chargeback is when a customer disputes a charge on their credit card with their card company. Typically chargebacks occur from the result of an unhappy customer

Reasons for Chargebacks

Customers often do not call merchants to resolve these situations before calling their credit card company. Sometimes the customers are intentionally creating chargebacks to get over on businesses. However the responsibility to satisfy the customer falls on the seller or merchant. Things like a delay in fulfillment, poor customer service, damaged goods, or irregular goods sold can all lead to chargebacks.

Dealing with Chargebacks

The best defense against chargebacks is a good offense. Preventing chargebacks from happening is the best way to combat them from occurring. The following suggestions are commonly used by business owners to help reduce their chances of receiving chargebacks:

Leave your Business Information on the receipt, physical or digital. Stating your DBA (Doing Business As) as opposed to your Corporate name (if different) will allow a customer to recognize the name on their credit card statement. Leaving the business name, address, and phone number could be crucial in helping your customers connect the card charge to your business, and remember making the payment. This will lower to chance of a customer mistakenly reporting a chargeback for your business.
Including your phone number on statements alongside your DBA or Business Name is also a great defense against chargebacks. The Phone Number provides a way for the customer to contact your business directly if they do not recognize your business name, which can increase the chances of a resolve before a chargeback is initiated.
Don’t Wait! Respond to Chargebacks Immediately. There are typically only 10 business days to resolve a chargeback, acting quickly will increase your chances of retaining and validating the charge in your businesses favor. Also if your business does not respond to the chargeback within the 10 business day period, the business will loose their ability to fight the chargeback.
Authorize your charges for the full amount of the sale, splitting declined payments into multiple charges can sometimes look erroneous to credit card companies, and customers reviewing their statements.
Never Except an Expired Card of any kind, Debit or Credit.
If your business is shipping goods or providing a service, always obtain signed proof of a delivery or job completion with the customer.
When Responding to a Chargeback, ask to Verify the Customers Address with their Cards Issuing Bank. Verifying the Customers Name, Phone Number, and Address can increase your chances of retaining the charge and beating a chargeback.
Be Suspicious of large transactions that are requested for immediate pick up or expedited shipping like next day air. Transactions like this are often linked to Chargebacks from Scammers.
Also be Suspicious of orders paid by a Domestic Billing Address with a Foreign Shipping Address, these Transactions are Typically Fraudulent.
Be Cautious with Foreign Orders of any kind. Random Orders from Foreign Countries not close to your business are generally considered High Risk.
Utilize the Processing Banks Fraud Services for (AVS) Address Verification Services to verify the customers address as well as the (CVV2) or Card Verification Value 2, the 3 digit code on the back of most major credit cards. Verifying this information will help your business Appeal Chargebacks.
Make your return or refund policy easily accessible for customers to read and sign before they make a purchase with your business. This can be used as proof that the customer has seen your return or refund policy prior to their purchase, helping your business Appeal Chargebacks.
Some chargebacks can stem from customer dissatisfaction with your goods or services. It is always important to work with your customers to ensure they are satisfied to increase repeat business and avoid chargebacks and unhappy customers.