How to Prevent and Dispute Chargebacks?

2018 September 21


How to Prevent and Dispute Chargebacks?

Chargebacks are an inseparable part of e-commerce transactions. However, you can take all the necessary measures to avoid them or minimize the risks.

A chargeback is a payment dispute filed by a cardholder with his card issuing bank. There are various reasons why a cardholder may dispute a transaction, so you should always be prepared to provide sufficient evidence that the transaction was valid.

As a payment service provider, we have encountered various chargeback cases. Therefore, we recommend you to take the following steps.

Chargeback Prevention Steps:

  • Provide as many details as you can about the goods and services you offer in your online shop;
  • State the exact prices;
  • Indicate exact delivery times and delivery prices;
  • Create a possibility to exchange an item/product or to claim a refund;
  • Make the return and refund policies available on your website and easy to reach;
  • Provide contact information and ensure a quick response from your customer service;
  • Keep records of all the available information about your customer and delivered goods or provided services;
  • Collect signatures when delivering goods in order to have evidence that they were delivered to the provided shipping address;
  • Make a clear and recognizable description which appears on your customer’s bank account statement;
  • Answer to your payment processor’s requests for information as quickly as possible;
  • Improve your fraud prevention tools.

It is always easier to deal with your customers directly. As a seller, you should be responsive to your customers’ problems and complaints. Do not wait for a chargeback to occur in your account, communicate with your buyers and offer refunds. If it happens that you receive a chargeback, do not ignore it, as you will instantly lose money. It may also badly affect your business in the future.

Can I dispute a chargeback?

Merchants have the right to dispute illegitimate chargebacks. Therefore, if you are sure that the transaction was legitimate, but your customer tries to deceive you or he/she simply forgot about the order, you should submit the evidence to your customer’s bank and justify the charge. This process is called chargeback representment.

Generally, the evidence that the issuing bank asks you to submit includes the following:

  • order’s time and date
  • customer’s billing information
  • IP address and country used for the order
  • shipping and tracking information

If you provide substantial compelling evidence, the issuing bank will decide the claim in your favour, and you will get the disputed amount back in your merchant account. If the customer wins the chargeback, you will not receive the payment back. A seller which exceeds the allowed number of chargebacks will no longer be permitted to accept credit cards in his online shop.

If you are not familiar with chargebacks yet or want to know more, you can read our other blog posts about the process of chargebacks and the chargeback reasons.

Open a merchant account for free
and start processing payments with Cardinity!