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Chargebacks: What Are They and How to Avoid Them
Wednesday, April 3, 2019

When you hear the word ‘chargeback’ how does it make you feel? Mad, scared, annoyed, confused?

A chargeback is the reversal of a credit card payment that comes directly from the bank. Chargebacks are designed to keep customers feeling secure from sub-par products or services, undelivered goods, and criminal fraud.

Unfortunately, customers can also abuse the chargeback process (friendly fraud) by claiming legitimate purchases are fraudulent.

Below are some ways to avoid chargebacks:

Provide contact information
Buyers may not resort to a dispute or chargeback if they can talk to you about the issue. Provide an email address or phone number, or even call buyers in advance when you'reselling higher-priced items.

Be responsive
No one likes to wait. Respond quickly and professionally to all reasonable buyer inquiries.

Provide a clear return policy
Make sure your return and refund policies are easy to find and understand.

Use a clear payment descriptor.  
Your payment descriptor should be the name of your business. If a consumer does not recognize the name on their credit card statements, they will be more likely to file a chargeback.

Learn to spot warning signs of fraud
Train staff to be on the lookout for suspicious transactions, verify signatures in card- present transactions and to obtain signatures on contracts and sales orders when appropriate.

Keep good records   
Keep accurate records of customers' credit card transaction dates, amounts and authorization information, in case you need them to fight a chargeback. Signed receipts or contracts are good to keep on hand too. This information will help win a chargeback dispute against a customer  who is unfairly trying to take advantage of the system or who may have simply forgot about the purchase.

What should you do if you receive a chargeback?

· Know your representment rights to avoid unnecessary losses for your business.

· Act promptly when customers with valid disputes deserve credits.

· When cardholders contact you directly to resolve a dispute, issue the credit on a timely basis to avoid unnecessary disputes and their associated chargeback processing costs.

· Let cardholders know immediately of the impending credit.

· Address all of the cardholder’s pertinent claims.

· Be sure to supply “compelling” information to prove the true cardholder participated in the transaction, received the goods or services, and benefited from the transaction when appropriate.

If you have any questions about chargebacks you can give us a call at 866.888.9724 Ext. 7.


Blog Categories

  • Miscellaneous
  • Just For Fun
  • Payments Industry
  • Products and Services
  • Data Security and Fraud Prevention
    • 05/29/2019 - Is Friendly Fraud Putting Your
    • 04/29/2019 - Gift Cards: The Gift That Thie
    • 04/03/2019 - Chargebacks: What Are They and
    • 02/13/2019 - 3 Tips To Protect Your Busines
    • 11/12/2018 - Are you PCI Compliant?
    • 03/14/2018 - Merchant Guide: 10 Essential T
    • 02/12/2018 - Common Business Scams and How
    • 02/09/2018 - Data Security Fast Facts
    • 01/17/2018 - Vulnerability Scanning vs. Pen
    • 01/17/2018 - BBB Warns of Email Scams This
    • 01/10/2018 - Arm Your Business Against Cybe
    • 11/15/2017 - MERCHANT FRAUD ALERT, 11-15-20
    • 09/22/2017 - Have You Heard How OMEGA’s Dat
    • 08/02/2017 - MERCHANT FRAUD ALERT, 08-02-20
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  • B2B and E-Commerce Solutions
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