Chargeback prevention and resolution – a brief guide

The cost(s) related to Chargebacks and Retrievals are for the Online Merchant to bear.
Fortunately, there are ways to avoid Chargebacks (and the fees).

The foremost purpose of a Chargeback is to guard cardholders from unlawful charges to their credit card. Regrettably, is isn’t always possible to prevent a Chargeback from occurring. However, there are ways to diminish the number received, by applying a Chargeback Management strategy for your business.
A structured prevention/defense strategy is a must for avoiding chargebacks, or, fighting them successfully if/when they do occur.

Below is some basic advice on how to prevent Chargebacks.

1. Make sure that you provide outstanding customer service. This helps to prevent dissatisfied cardholders from initiating chargebacks. If their problem is resolved quickly and proficiently, the Cardholder will have no reason to submit a Chargeback.
2. Be attentive to the to technical aspects of the entire Payment process. Promptly Void or Refund duplicate transactions, use correct expiry dates, and process Refunds for returns and Cancellations on time. Sometimes pre-emptive Refunding is a wise step to take. This can mean a loss of Revenue, so this option should be used sparingly.
   Quality Customer Journeys make life easier and better for you and your customers. This will increase retention and recurring sales as well.
3. Make sure your Billed as Descriptor, as shown on the Cardholder Statement is correct and makes sense to the Cardholder. Also make sure that any Support websites and/or telephone numbers are correct and working.
4. Describe the products and your additional services in detail on your website. Make sure that you add clear pricing in whichever currency is applicable for each and every product and service
5. If you find yourself having to perform a lot of Refunds, it could be worth evaluating your Payment flow. Perhaps an Authorize/Capture Payment flow would be more advisable in this case.
6. Keep track of and retain proof, or confirmation of deliveries for each sale. Your delivery/shipping partner can help you with this. Make sure that you make clear arrangements with them
7. Invest in basic chargeback management training for your Payment Team employees and Finance teams. Ensure that all (new) employees are aware of what Chargebacks are and what their potential damage can be.
8. Always ensure that you submit the documentation requested by the Issuer/Acquirer within the time period indicated on the chargeback notification. This is of extreme importance, as failure to do so means you will automatically lose the Chargeback.

If you do find yourself involved in one of Visa’s two dispute monitoring programs, Visa Fraud Monitoring Program (VFMP) and Visa Chargeback Monitoring Program (VCMP), it is of the utmost importance that you work closely with your Acquiring institution and/or Payment Service Provider. The same applies for Mastercard’s CMM program, of course.
You must endeavor to answer all questions and provide any and all documentation as soon as possible.
Simply put, there is no time to lose when this happens and making sure that you are vested in finding a solution can make a lot of difference for both continued and future Card Acceptance.

The Chargeback mechanism is geared strongly towards protecting the Cardholder.
Preventing friendly fraud, or simply mistakes by and from Cardholders can be a struggle. Unfortunately, the liability borne for Card-Absent / CNP Merchants is and can be painful and expensive. Ensuring effective Chargeback management and prevention is a prerequisite for any CNP Merchant.

If you implement the tips and tricks provided above, use common sense and above all, have a solid product to sell, you should be fine.

If you have any questions, please feel free to reach out to us:

info@acpays.com and/or https://acpays.com