ESSENTIAL ASPECTS TO AVOID POTENTIAL CHARGEBACKS

Chargebacksprimarily occur for three reasons:

Item Not Received. The cardholder placed an order, paid for a service or product, but claims to have not received the order or service.

Significantly Not As Described.The cardholder claims that the product or service received was sub-standard, compared to the merchant’s description.

Unauthorized Transaction.The cardholder claims that a transaction is fraudulent or was processed without the cardholder’sconsent.

In all three scenarios the cardholder has a legitimate right to file a chargeback and receive a refund of the transaction amount.

Good Customer Service Helps to Avoid Chargebacks

As a merchant you want to maintain a good customer relationship toavoid the inconvenience and costs associated with chargebacks. Here are a few suggestions:

Customer Service Contact Information. Ensure that your website makes it easy for customers to find your contact information. Using an email contact formis a great idea. The easier it is for a customer to contact you directly the less likely they are to call their bank or credit card company first and file a chargeback.
Order Confirmations. Send a confirmation email as soon as an order is received, and make sure to include your contact information. Or call the customer to confirm the order before dispatching.
Customer Inquiries.Respond quickly to all customer inquiries. No one likes waiting unnecessarily for a reply.
Dispute Resolution. Have company policies in place to resolve common customer complaints. A well-trained customer service team is a must.
Return Policy.Make your return policy easy to find online and word it in a way customers can easily understand. Not everyone understands legalese.

Preventing Disputes from Turning into Chargebacks

Item not Received Dispute. Keep a record of the shipping address provided by the customer during the order process. Purchase shipping insurance to cover any damagedor lost orders. Use a shipping method that allows online tracking of packages and delivery confirmations which will give youand the customer proof that an order was sent on time and to the correct location. If an Item is not available or was damaged or lost while in the process of being delivered,inform the customer that you are regretfully cancelling the order and give them a timeframein which to expect a refund. Then process the refund as quickly as possible.

Significantly Not As Described Dispute.Product and service descriptions should be accurate, with nothing kept hidden from the customer. Include such things as “no color choice” or “product may appear slightly different than the picture.”

Unauthorized Transaction Dispute.There are situations when a charge is clearly fraudulent, and then there are times when a transaction may only appear to be fraudulent to the cardholder. In the second instance, the cardholdermay have just forgotten about a purchase, may not recognize the company name, or has forgotten special circumstances that permitted the charge. The only way to resolve these kinds of disputes is through direct contact with the cardholder.

Dealing with customer service and chargeback issues can be overwhelming and takes away time from other business activities.Contracting out customer service functions and chargeback management is always an option and can prove to be a more efficient and less costly solution.

Best Steps to Fighting Chargeback Froud.

While chargebacks came about to help customers feel comfortable with using their card knowing that their money was secure, we have seen in recent years a plethora of chargebacks to other businesses, some legitimate, others could have very well been prevented.

There are many reasons why a consumer may initiate a chargeback.

Processing errors.

Fraud. Some customers try to get away requesting a chargeback after they have already received their goods and/or services.

Customer disputes.

Merchant overcharged the customer.

Product never arrived.

Credit or debit card was used without permission of the cardholder.

So, why should a business fight chargebacks? Mainly because the ramifications of these chargebacks will hurt your business profits quite substantially. Too many chargebacks can hinder one’s business and you will begin to see quite a loss in profits pretty fast. Chances are when you receive a chargeback, not only will you be out the profits, you will more than likely not receive your product back from the customer so in reality, you are losing double the money. You will also be charged a chargeback fee from your bank which can range anywhere from $20-75.

Chargebacks are one of the biggest reasons why eCommerce business get into trouble with their payment processing provider. These providers only allow a certain number of chargebacks before they will eventually suspend, or close your merchant account and some even charge a considerable fee. Usually the amount allowed is 1-2% though this varies with each processing center. For this reason it is very important that you take care of any potential chargebacks in the very beginning of the process and learn to manage your business to reduce the amount of chargebacks initiated in the first place.

Understand your risk. Merchants who do business online are at particular risk of chargeback fraud because they are not able to see the credit card being used or check a customer's identification or signature, says Monarch. As a result, it can be easier for fraudsters to use stolen credentials to order merchandise online. In addition, because the merchandise is often shipped without a signature required for delivery, it can be easier for friendly fraud perpetrators to claim the product was never received.

Look for unusual activity. From there, Van Riper recommends monitoring transactions for unusual activity, such as orders for high volumes of product or for many expensive items of the same type or brand. Review the location of the transaction. If the billing address is in New York and the customer is shipping to a place in Oregon, you may wish to further verify the transaction by contacting the customer.

Examine notification codes. When you receive a chargeback, it will have a reason code. Each code, which varies by card network, will indicate the reason for the chargeback, such as "counterfeit magnetic stripe" or "fraud, card not present environment." Once you have the code, investigate the transaction to spot irregularities, says Russo. Were there missed indicators that this was a fraudulent transaction?

Review nonfraud chargebacks and declines. Don't just scan your reason codes for fraud. Investigate other reason codes and your decline rates, Russo says.

Make your case. If a chargeback has been filed, the bank will ask for all records you have verifying that the order is real. Be sure to provide those in a timely manner, Monarch says. They may include terminal records, signatures and any other information available for in-person transactions. Online transaction backup may include address verification and CVV verification, IP address information that coordinates with the purchaser's address, and product delivery records with delivery confirmation showing the customer received the package.

Work with your processor. Russo, who has previously been employed by two processing companies, says these firms may have additional resources to help you combat fraud, such as suggestions for enhancing security and advice on how to better verify transactions. Stay in touch with your processing company to ensure that you're adopting the latest and best practices to prevent fraudulent transactions, he says.

While some chargebacks may be your fault, others can be preventable and then there are others that you can fight that have no merit. Let us help you fight against chargebacks. It could potentially save your business…and your pocketbook.

Most Common Causes And Prevention Of MasterCard Reason Code 4802

Description

The buyer’s bank requested a copy of the order receipt, and found it as an illegible copy, or something other than the requested item. Most commonly caused by the seller when he provides a substitute order receipt that did not contain all of the required information or was an incomplete substitute acknowledgment, or other than the requested item. Mastercard chargeback reason codes describe the motivation for a cardholder’s dispute with a merchant and are identifiable by their four-digit numbers

Most Common Causes

The merchant submitted order receipt with the information which is not sufficient or incomplete or is different from the requested information.

Characters in the receipt were invisible or not prominent because of light ink.

• The copy is ribbed or on colored paper.
• The copy is faded or stained.
• The original order receipt is mishandled.
• The original sales receipt is scanned in smaller size, makes it unclear or different

Evidence Required

• If possible, resubmit a copy that is clear enough to read or complete copy of the order receipt to the acquirer.
• If the merchant has incomplete or missing information, accept the chargeback.
• If the merchant provided illegible copy and an enquiry is related to a fraud, accept the chargeback.

In such case, the merchant doesn’t have any re-presentment rights.

Prevention

Scan the order receipt in actual size as original sales receipt or print on white paper only. Scanning in smaller size makes it unclear or distinct.

Replace/refill the printer’s toner or cartridge so that it doesn’t run low on ink or paper. When the ink starts to fade, use different cartridge. When the first copy starts to fade or stain, change the roll of the printer.

Print and keep white copy of order receipt, give colored one to the customer, the color paper does not copy as visible as white one.

Make copies at the similar size as the original order receipt. If the sales acknowledgement is scanned or microfilmed, do not reduce the image size, it results in poor quality of the copy.

Position of the company name/logo should be separate from transaction information, make sure that the company name or logo on the order receipt is visible. Business message should be printed away from the transaction information.

Make sure the company’s name on buyer’s bill or billing statement is clearly visible and is also correct, the customer must check this information on the credit card and then see the merchant’s name and descriptor on the billing statement.

Common Examples:

Linda complains to the bank that the charge on her card is more than she was supposed to pay on which her bank asks the merchant to provide them with a copy of the receipt. The merchant hence fails to submit a complete and readable copy of the original receipt and therefore endures a chargeback under the Reason Code 4802: Request Copy Illegible or Invalid.

George thinks that he received a call from his internet service provider regarding a due charge so—he pays the amount, however, he later realizes that it was a fraud call. He calls his bank about the fraud on which the bank reaches out to the merchant. The merchant fails to provide the copy of receipt in order to prove that the customer rendered any of their services. Hence the bank puts a chargeback on the merchant under the Reason Code 4802: Request Copy Illegible or Invalid.

Most Common Causes And Prevention Of Visa Reason Code 30?

Description

The issuing bank received a claim from the cardholder that merchandise or services ordered were not received or that the order was cancelled due to the delay in the delivery of merchandise or services. The most common causes of this chargeback reason code are when services are not provided, merchandise is not shipped, transaction is billed prior to shipping the merchandise or when merchandise is not sent by the agreed upon delivery date.

Most Common Causes

Did not send the goods/service by the agreed delivery date.

Didn’t clearly mention the expected shipping date and arrival date for the order.

Didn’t deliver the goods or provide the service as per in the agreement.

Billed the cardholder before delivering the merchandise.

Didn’t make goods available for pick-up upon agreement.

Merchant Responses:

• If the merchandise was delivered by the agreed upon delivery date, provide details of delivery or evidence of delivery, such as a delivery receipt signed by the cardholder or delivery confirmation that the merchandise was delivered to the correct address.
• If the merchandise has not been delivered yet, there is a set delivery date, provide a copy of the sales receipt, invoice, or other information showing the expected delivery date.
• If the merchandise was delivered after the agreed upon delivery date, provide the shipment date or expected delivery date or proof of delivery and acceptance by the cardholder at the correct address.
• If services were rendered, provide the date services were completed and evidence that the customer acknowledged receipt (signed sales receipt, invoice, etc.)

Prevention:

If delivery of goods or services are delayed, advise or notify the customer in writing and make available an expected shipping date. Provide the cardholder the option if he wants to continue with the order or cancels it.

For future delivery of Goods or services, clearly mention the expected shipping date and delivery date on the invoice or order receipt.

For services rendered, provide a signed order receipt or invoice showing receipt of services.

For delivered merchandise, no need to provide order receipts until the product has been shipped.

Communicating with the Cardholder:

Clear lines of communication for chargeback reason code between the merchant and the cardholder are a vital component to successful credit card processing. When cardholders do not recognize a charge or have difficulty reaching the merchant with questions, it opens the door to cardholder disputes and chargebacks. Written communications with the cardholder via email or print can be a powerful aid to keeping the lines of communication open and can provide the merchant with additional protection in the event of a chargeback or dispute.

Common Examples

Linda ordered a new dress online. It’s been over the time frame of the merchant’s shipping policy and she didn’t receive the dress yet. Now Linda has two options, either contact the merchant and request the information on her dress, OR contact her bank and start a dispute with Reason Code 30: Services Not provided or Merchandise Not Received.

How Does The Chargeback Real Time Alerts Work?

Chargeback is something no merchant would want to experience in his or her business and get distresses with. However, it is next to impossible to attain 0% chargeback ratio. Well, what if Chargebackexpertz assures you with an effective chargeback network that alerts you about a chargeback in near real-time so that you can take quick and adequate action in no time?

Real-time Alerts is a reliable chargeback management tool that helps in preventing chargebacks and also dispute some of them that affect the business revenue.

Stop Fraud

Fraud alert system is what every merchant needs to fight against a chargeback. However, most of the merchants take a fragmented approach to prevent fraud that leaves them open to increased and improved attacks. As a result, security risks and financial crimes are increasing day by day.

Customer fraud is one of the fastest growing threats in the e-commerce industry and it is affecting businesses of around 80% of the merchants every year. To fight against such threats, merchants need a system that helps in dealing with such frauds by customers and that also enables them generating better revenue. Chargebackexpertz provides a real-time fraud alert system that sends a notification to the merchant once the issuing bank confirms the fraud.

Using Fraud Alert

During chargeback, you not only lose the product sold along with the cost but you also have to pay an additional chargeback fee as a penalty. It also damages the image of the company and can become the reason of getting under the fraudulent tag. To avoid such situations, we offer a chargeback Alert System as per your requirements that is also updated at regular intervals. The benefits include:

Stopping fulfillment of fraudulent orders, which in turn helps in saving cost of product as well as cost related to fulfillment

Reducing chargebacks

Adding to the current Cyber Source Service.

Benefits

Our real-time alerts help in saving chargeback fee, which is otherwise spent on chargeback management

We provide one of the largest networks as we are connected with a number of issuers

Alerts help merchants to lower the chargeback rate, which can prevent freezing of account/funds

We only charge for the services availed, no extra/hidden fee We provide detailed reports and diagnostics services

With very less integration, merchant can start receiving alters within 24 hours

With real-time alerts merchants can prevent frauds in no time

Connect with Chargeback Expertz

Chargebackexperts have been successfully providing the largest chargeback Real-Time Alert network for years. We provide reliable dispute mediation network as well as proprietary technology. Unlike most of the chargeback alert networks, we provide comprehensive network coverage that permits maximum issuer involvement and guaranteed chargeback reduction.

For further assistance feel free to call us on +1 855-465-4723

Every Merchant Needs Fraud alert Service to Stop and Prevent from Chargebacks

Fraud alert system is what every merchant needs to fight against a chargeback. However, most of the merchants take a fragmented approach to prevent fraud that leaves them open to increased and improved attacks. As a result, security risks and financial crimes are increasing day by day.Customer fraud is one of the fastest growing threats in the e-commerce industry and it is affecting businesses of around 80% of the merchants every year. To fight against such threats, merchants need a system that helps in dealing with such frauds by customers and that also enables them generating better revenue. Chargebackexpertz provides achargeback fraud alert system that sends a notification to the merchant once the issuing bank confirms the fraud.

Features

Monthly Performance Reports

Control Features of Alerts Received

Notification via E-mail

Implementation of Stand-alone Service within 48 hours 

Multiuser Setup to Receive Notification

Real-time Notifications, as soon as bank confirms the fraud

Chargeback Alerts

Chargeback is something no merchant would want to experience in his or her business and get distresses with. However, it is next to impossible to attain 0% chargeback ratio. Well, what if Chargebackexpertz assures you with an effective chargeback network that alerts you about a chargeback in near real-time so that you can take quick and adequate action in no time? Real-time Alerts is a reliable chargeback management tool that helps in preventing chargebacks and also dispute some of them that affect the business revenue.

Benefits of using Fraud Alert

During chargeback, you not only lose the product sold along with the cost but you also have to pay an additional chargeback fee as a penalty. It also damages the image of the company and can become the reason of getting under the fraudulent tag. To avoid such situations, we offer a Fraud Alert System as per your requirements that is also updated at regular intervals. The benefits include:

Stopping fulfillment of fraudulent orders, which in turn helps in saving cost of product as well as cost related to fulfillment

Reducing chargebacks

Adding to the current Cyber Source Service.

Connect with Chargebackextertz

Chargebackexperts have been successfully providing the largest chargeback Real-Time Alert network for years. We provide reliable dispute mediation network as well as proprietary technology. Unlike most of the chargeback alert networks, we provide comprehensive network coverage that permits maximum issuer involvement and guaranteed chargeback reduction.

SIMPLE AND SUPERIOR WAY TO MINIMIZE CHARGEBACKS

First of all, we are know about Chargebacks Chargeback is a mechanism by which a cardholder claims the merchant and calls the credit card issuer to dispute a transaction. Cardholder may have various reasons to raise a dispute against the transaction like: goods and services never supplied to the customer, defective merchandise received by customer, refund not processed to customer, merchant used expired card and so on.

                   Simple way to minimize chargebacks

Process a Settlement each day for each transaction:Failure to deposit in a timely manner can result in chargebacks for “late representment”. Settle your credits or refunds daily; failure to do so in time can result in chargebacks for “credit not processed”. Promptly process refunds; never keep the customer hanging. If the merchant issues a refund by check, make sure to keep a front and back copy of the check along with the postage receipt. Gateway refunds should be processed within 3-5 business days. Never accept an expired credit card.

Use a clear retail descriptor which customers will easily recognize: A retail descriptor is the business name customers will see on their credit card statement reflecting the purchase. Always include your phone number with the descriptor. If the customer does not recognize the name, they can call the number to verify the purchase.\

Use the Address Verification Service (AVS) and the CVV security code: Doing so requires the customer to confirm their zip code and/or their security code; this is an easy way to remove the possibility of stolen credit cards. Take note if a buyer requests to change the shipping address after placing an order.

Sign up with the Chargeback Prevention Alert System: Major banks like Fifth Third Bank,JP Morgan Chase, Wellsfargo, Bank of America, PNC, RBS Citizens and over 50 other banks participate in theprocess . The system allows the merchant to connect directly with distressed customers; then the Merchant can resolve the concern with the customer and/or Credit the transaction. The Moto is “AVOID CHARGEBACKS.”

Keep a record of shipping history: Immediately ship products. If you offer delayed delivery then indicate it on the sales receipt. Keep track of Proof of Delivery. Visibly post return or refund policies on your webiste.

Respond to chargebacks A S A P: There is a limited time to respond to Chargebacks, if you miss the deadline, you have lost the ability to fight that chargeback. No response to a chargeback is the Merchant’s acceptance to the Chargeback. Fight Back! Win back your lost Revenue! Chargeback Management system with ChargebackExpertz is superior to any other system out there. Fight and Win up to 80% of your Chargebacks!

Keep copies of all Sales Receipts for at least 24 months: Sales Receipts should be filed by the order date. Clearly print return or refund policies for your business on the sales receipts. Your customer service number should be printed on every single sales receipt. Sales receipts must all be legible and should reflect your business name exactly as it appears on your signage. In case of a retrieval request or a chargeback, you will need to provide a legible copy of the sales draft.

Customer Service is the Key: Credit card fraud is very difficult to avoid when the cardholder and the card is not present during the transaction. Keep a list of bad customers to identify high risk orders. Often, disputes are because of “friendly fraud” or the customer simply regrets making the purchase. The best way to avoid this type of chargebacks is by responding with great customer support.. A partial refund is an option, but full refunds can be considered to avoid a chargeback (unless you are sure that the transaction is fraudulent).

Be conscious of card checkers: These are buyers who place low dollar transactions and then place large dollar transactions. Professional fraudsters tend to place a large volume of orders within a short period of time. Carefully review and verify such activity. Be wary of buyers who place orders using information such as different names, billing details, or email addresses. Take note of buyers purchasing unusual volumes of merchandise, and verify the possibility of duplicity.

nvalid or a wrong number

Phone number does not match the state or country of the billing address

IP location does not match the billing address

Website log-in or registration details do not match the order’s details (such as name, IP, or email address)

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