A credit card chargeback occurs when a payment is reversed. You may be able to see that a purchase was made and that money is on the way and then for some reason the transaction is cancelled and you no longer have funds on the way. This is always a frustrating situation, but one that as a merchant account provider you will likely face many times.
Let’s take a look at some reasons for credit card chargebacks:
- Dispute: item not received by consumer, or is defective, service not performed to specification, or it was a fraudulent purchase.
- Errors in processing: customers was charged the wrong amount or the charge was duplicated and processed more than once.
- Issues with authorization
- Unfulfilled copy requests
Often you don’t have any control over a chargeback but there are a few things you can do to make the whole process a little less messy.
- Respond promptly and graciously to any inquiries from customers
- Don’t accept expired cards
- Obtain and check the cardholder’s signature
- Don’t accept transactions from cardholder’s that don’t have their card with them
- Make sure sales receipt is legible
- If transaction is declined, request another form of payment
- Ship merchandise prior to depositing transaction
- Alert customers to any shipping delays or backorders – find out how they would like it handled
- Make sure policy for returns, refunds, and/or cancellation of services is readily available and clearly stated.
While you can’t prevent all credit card chargebacks, these tips can help you understand them and make the process as simple and straight forward as possible.