FRAUD AND CHARGEBACKS
Fraud and chargebacks can have a detrimental effect on your business. Not only can you lose products and money, but your merchant account can be terminated if your chargeback ratio exceeds the allowable thresholds. We understand the complex rules.
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IS YOUR ORGANIZATION PROTECTED?
PREVENTING CHARGEBACKS
PREVENTING CHARGEBACKS
PREVENTING CHARGEBACKS
A chargeback is the return of funds to a consumer, mainly used in the United States, forcibly initiated by the issuing bank. Knowing the specific rules and regulations about chargebacks can help protect your business and prevent severe losses. Learn more about the best practices for preventing chargebacks. We also offer a free comprehensive training based upon your specific business.
WINNING CHARGEBACKS
PREVENTING CHARGEBACKS
PREVENTING CHARGEBACKS
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. Learn more about the best practices for winning chargebacks. We're experts at understanding the rules and regulations of the card associations which can be the difference between winning and losing.
BEST PRACTICES FOR PREVENTING CHARGEBACKS
RECOGNIZABLE NAME
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.
AUTHORIZATION
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.
COMMUNICATION
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.
USE FORESIGHT
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.
USE TECHNOLOGY
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.
ADDRESS VERIFICATION
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.
INTERNATIONAL SHIPPING
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.
VALIDATION DOCUMENTS
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.
BEST PRACTICES FOR WINNING CHARGEBACKS
TIMELY RESPONSE
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.
DOCUMENTATION
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.
TERMS OF SERVICE
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 says indicated "I Agree".
PICTURES OR VIDEO
When appropriate, take pictures or video. This can be used when packing merchandise, affixing a shipping label, or delivering a product.
KEEP EMAILS
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.
USE THE CORRECT TERMINOLOGY
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.
VIDEO
The ability to create video recordings is readily available to anyone with a smartphone or tablet. Creating a video that includes the product, the packaging, the serial number (if applicable), and the shipping label will add additional layers of protection.
TERMS AND CONDITIONS
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.
REFUND POLICY
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).
WARRANTY POLICY
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.
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 37 years and maintains an "A+" rating with the Better Business Bureau.
"Visa", "MasterCard", "American Express", "Discover", "OptBlue", "Apple Pay", "VeriFone", "ARB", "CIM", "PulsePoint", "Global Learning Lab", and "CardX" are trademarks and/or service marks of their respective owners.
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