What are chargebacks? A chargeback occurs as soon as one customer disputes a transaction processed by a company. The customer would call the issuer of his debit or credit card to cancel the transaction. Chargebacks are meant to protect cardholders from unauthorized transactions.
When you have a chargeback, the disputed funds are withheld until a decision is made by the card company (Visa, MasterCard, and others). The company handling the dispute will investigate whether it is the cardholder or the business that is acting in bad faith. Unfortunately, the dispute resolution process is long and complex. This requires many documents and administrative procedures.
In the event of a chargeback, you will be notified by either a letter sent by mail, an email, or a phone call. With most companies, you will receive an email from the support team, and you will receive a letter in the mail. You have 30 days to respond if you dispute this chargeback. It is important to respond before the end of the deadline. If the deadline has passed, you can no longer dispute the chargeback. It is therefore important to respond quickly with the requested documents.
To dispute a chargeback, here is a list of documents below that might be requested. Complete the “Chargeback Dispute” document by the due date.
- Explanation of the event
- Customer Info:
- Full Name
- Payment method (Card present or not present)
- Provide the following documents:
- Transaction invoice
- Contract signature
- Video of the transaction (If possible)
- Written conversations with the client (Email / Text)
- Proof of purchase of the product (s) from your supplier
- Proof of product delivery
- Other documents deemed relevant
How to Avoid a Chargeback?
There are many ways or procedures you can put in place to prevent a chargeback. Although nothing can prevent them all with certainty, there are several steps that merchants can take to prevent certain types of chargebacks. Here are some suggestions:
-If possible, always try to obtain the customer’s signature when shopping in person or remotely.
-Require government-issued ID before each large credit card purchase and keep proof of all orders.
- Have a clear and easy-to-understand return policy.
- Display a recognizable business name on credit card statements.
- Use a delivery service that requires a signature from the customer.
- Train your employees in the best practices of paying for a transaction in person and remotely.
- React to issues raised with customer service in a prompt and courteous manner.
- Make sure you have very clear terms and conditions on your website.
Remember: If you are charged a chargeback, it is important to respond quickly to your bank or payment service provider. Many banks simply do the chargeback for the customer if a merchant does not respond within a certain timeframe. Chargeback prevention does not have to be difficult if you follow these steps.