Chargebacks can have a detrimental effect on your business. We understand the complex rules and have the knowledge & experience to protect your organization. Understanding chargebacks, card association rules, and dispute resolution processes will help your business prevent unnecessary challenges.
A chargeback is the temporary return of funds to a consumer, mainly used in the United States, forcibly initiated by the consumer or issuing bank. Knowing the specific rules and regulations about chargebacks can help protect your business and prevent losses. Learn more about the best practices for preventing chargebacks. We also offer all clients a free comprehensive chargeback training based upon your specific business.
Depending on the configuration of your account, chargeback notices are sent via regular US mail or via email. Velocity Processing provides all clients with access to Payments Insider where you can view chargebacks, statuses, and all applicable documentation. We also encourage clients to view their bank account on a consistent basis to see if there are any merchant processing debits outside of the normal debit schedule.
Chargebacks are inevitable. When it happens, you want to be prepared and do everything possible to win. As our client, we'll actively help you fight a chargeback and guide you on completing the documentation. We're experts at understanding the rules and regulations of the card associations which can be the difference between winning and losing.
Chargebacks codes are the standardized codes utilized by the card association to identify the reason for a chargeback. When a chargeback is initiated, the consumer must provide their issuing bank with a reason for the dispute, which in turn is included in the official chargeback documentation provided to the business.
When a customer views their credit card statement or activity, they are seeing the name registered by the processor. Using a legal entity name instead of a DBA name can confuse a customer. You want to ensure that when the customer sees the transaction, they immediately think of your business.
Only charge a card if you have authorization. Having access to the card number does not give you the right to charge the card, even if the customer owes you money. Unauthorized charges will lead to disputes.
Communicate with your client so they know when to expect a charge, and the monetary amount. Customers are very particular about being surprised with charges to their card. The better the communication, the fewer the chargebacks.
You're an expert in your industry, so you know where a customer may experience a potential issue. Instead of waiting for an issue to occur that could lead to a chargeback, be proactive. Sending an email to the customer or communicating a policy that you will do everything you can to give them an amazing experience will guide them to you if a problem arises, rather than issuing a chargeback.
Using technology to remind a customer about an upcoming charge, delivery, or return is easy and goes a long way. Receiving an email or text notification advising that a payment will be charged reminds the customer and gives them the opportunity to contact you if necessary.
Using our technology to verify the address with issuing bank, in conjunction with performing your own verification, will help prevent accepting a fraudulent card or shipping merchandise to an unauthorized address. The card associations won't protect you if you ship to an address that isn't on file with the issuing bank.
Address verification isn't available on international cards, making international sales slightly more complicated. Before shipping internationally, it is important to understand your risk tolerances, projected losses, and profit margins. Commerce has certainly gone global and products are shipped across the world daily, however there is inherent risk with international shipping.
If there is uncertainty about an address, a common technique is to obtain a validation document, such as a phone bill, utility bill, or other document showing their name and address. Ask for documents that come from popular companies like a utility company or cell phone provider, as opposed to a document that can easily be created like an invoice from an accounting software.
All chargebacks must be responded to in a timely manner. If you fail to respond before the deadline, you will lose, regardless of the merits of your response. For this reason, we send all chargeback notifications to you via email and also by mail.
In the event of a chargeback, it's up to you to prove that the transaction was valid and that the customer received the goods and/or services. Consider what would happen if you went to court or arbitration. You must have tangible proof. Using documents, online forms, and/or digital signatures will substantially increase your odds of winning a chargeback.
Have the customer sign your terms of service, including your refund policy, warranty policy, delivery policy, and cancellation policy. Most companies today place all of this information online and have the customer click a check box.
When appropriate, take pictures or video. This can be used when packing merchandise, affixing a shipping label, or delivering a product.
Exchanging emails with a customer keeps a history of your conversation and your agreement. If there's ever a question, you can reference the email, even if it simply confirmed a call and outlined the bullet points.
The card associations look for key terms when evaluating a chargeback. One of the most important terms is "100% satisfied". By using this term when communicating with your customer about a product and/or service, you can protect yourself if they decide to change their story at a later point in time.
Every business has the right to create their own terms and conditions. With documentation or an electronic capture from your website, being able to show that your customer agreed to your terms and conditions defines the steps in the event of a problem. Use the terms and conditions to specify as many details as possible.
Defining a refund policy and having your customer acknowledge the policy will assist in the event of a desired refund. By defining the refund policy, the customer will know the exact circumstances of an acceptable refund (i.e., timeframe, restocking fee, verification of items returned, etc).
Sometimes a product has an issue and the manufacturer will provide assistance. Because customers look for the path of least resistance, they may issue a chargeback instead of reaching out to the manufacturer. Help the customer understand the warranty policy and define the difference between the product warranty issued by your company and the warranty guaranteed by the manufacturer.
Fraudulent processing of transaction
No cardholder authorization
Cardholder does not recognize the transaction
Chip liability shift
Request authorization not obtained
Request required authorization not obtained
Account number not on file
Point of interaction error
Credit not processed
Non-receipt of merchandise
Service not rendered
Cardholder does not recognize the transaction
Request for copy bearing signature
Cardholder does not recognize transaction
Fraud analysis request
EMV liability shift counterfeit fraud
EMV liability shift non-counterfeit fraud
Other fraud card present environment
Other fraud card absent environment
VISA fraud monitoring program
Card recovery bulletin
Incorrect transaction code
Incorrect account number
Paid by other means
Merchandise / services not received
Not as described or defective merchandise / services
Credit not processed
Cancelled merchandise / services
Original credit transaction not accepted
Non-receipt of cash or load transaction value
Velocity Processing is a registered Independent Sales Organization (ISO) / Member Service Provider (MSP) of Elavon, Inc. Georgia, a wholly owned subsidiary of U.S. Bancorp, Minneapolis, MN. Elavon has been processing electronic payments for 38 years and maintains an "A+" rating with the Better Business Bureau.