Chargeback Prevention

/Chargeback Prevention
Chargeback Prevention 2020-02-26T17:41:16+00:00


Chargeback Prevention
Quick Links

Payment Processing
Bancard Financial Merchant Accounts
International Merchant Processing
Bancard Financial Gateway
Online Checks
Risk Management
PCI Compliance
Chargeback Prevention
Retail Merchant Processing
Online Services
Travel and Entertainment
Food and Beverage
Chargeback Prevention | Avoid At All Costs
Having the ability to accept credit card payments for your business is a smart idea. The internet has become a great way for people to shop conveniently all over the world. However, it is very important that you do not encounter a high number of chargebacks. The team at Bancard Financial Gateway knows what it takes to cut down the chances of having a lot of chargebacks.
First, it is important to have an understanding of chargebacks, or reversals. Cardholders obtain their credit cards from their bank, which is known as their “issuing bank. A chargeback is provided to protect cardholders by the issuing bank. This allows cardholders to file complaints regarding fraudulent transactions on their statement. The issuing bank will make an investigation following the complaint.
If the transaction is proven to be fraudulent, the issuing bank will refund the original value to the cardholder. As a merchant, if you are not able to prove that the transaction was legitimate, the bank will take back the entire value of the transaction from your merchant account, accompanied by an additional fee. If the complaint made by the cardholder is proven to be false, the merchant is not required to refund the value, but there may be additional processing fees. The reasons why your business should not be involved with chargebacks is very obvious. These situations pout you at risk of losing services or products that have already been sold, the payment, payment processing fees, money for chargeback penalties, or even possible currency conversion commissions.
Reasons for Chargebacks
You, as a merchant, need to be fully aware of the most common reasons that merchants receive chargebacks. These circumstances should be avoided at all costs. Bancard Financial has a team that will be able to provide you with the protection you need to avoid these chargebacks.
Fraudulent Transactions
The internet is a great place for consumers to find information on services and goods, and to purchase them from the convenience of their homes. However, if you are not using a service provider that will protect the financial and personal information of your consumers, that sensitive information could easily be used without authorization. This results in fraudulent transactions. When instances like these occur, the merchant is held solely responsible.
Credit Was Not Processed
This is another very common type of chargeback. This can happen when a customer may have returned merchandise to the merchant, and requested to get their money back but say that the credit was not posted to their account. Merchants are also held responsible in these types of situations.
The Items Were Not Received
This is a very common reason for chargebacks. This happens If a customer never received an item that they paid for with their credit card. This is another situation where the merchant would be charge accordingly.
Technical Issues
A lot of chargeback requests are the result of technical issues during payment processes. If there is an issue between the merchant and issuing bank, this may lead to consumers being charged twice for the same transaction. This is also referred to as duplicate processing. Sometimes, there can be issues with the authorization process. These types of issues can lead to a cardholder’s account being charged, even if the transaction was declined.
There are other reasons for chargebacks, but these are the four main reasons. The more detailed reasons include situations such as faulty credit cards and human error made during payment processes. These situations may be beyond your control as a merchant.
Chargeback Prevention
Merchants all around the world dread chargebacks, rightfully so. Though chargeback cases can be win by honest sellers with proper evidence, there is still time taken away from the business and hassle. That is why it is best to avoid chargebacks altogether.
First and foremost, you need to be an honest seller. If you are completely honest, this means that unless customers are creating problems for you, you will have fewer issues. This is why you should always be sure that you present your items at their very best and always provide excellent customer service, no matter what. This way, if there is an issue; customers will not feel the need to complain to their issuing bank about the transaction. Secondly, it is extremely important to prevent unauthorized and fraudulent transactions. These are some red flags for possible fraud:
  • Orders that are made with the use of free email address
  • Several different orders made using different cards, but only delivered to one address
  • A lot of different orders made within a short period of time
  • Orders made with several attempts to enter the expiration date or card number
  • Different delivery and billing addresses
  • Orders for big ticket items
  • Bulk orders that seem to be beyond the typical range
  • Orders demanding rush or overnight delivery
It is important to your business that you use a merchant service provider with a qualified team to help you to avoid chargeback situations. Not only can this save your business money and time, but it is also important for always ensuring that your business is growing.