How to Handle a Credit Card Chargeback

October 29, 2018

credit card chargeback

Credit card chargebacks happen when a customer disputes a purchase or requests a refund, and funds are transferred back into their bank account or credit line. Chargebacks often make up for credit card fraud, but consumers may also request a chargeback if they never received an order, believe a product they purchased is unsatisfactory, felt they were overcharged, or don’t remember or recognize a charge.

While these transaction reversals are initiated and managed by the cardholder’s bank and are often designed to protect the consumer, they can be frustrating to honest merchants, and can threaten their business.

Here are four ways for merchants to handle credit card chargebacks.

 

1. Use clear, identifiable payment descriptors

Using a clear description is crucial for properly handling credit card processing and dealing with chargebacks. It’s common for customers, when reviewing their credit card statement, to see the name of a parent company, abbreviations, or an otherwise unrecognizable item on the list. An identifiable description can help prevent chargebacks by not confusing the customer when they look through their statement. It will also serve as a helpful reference if there is a chargeback.

You’ll only have a few words or characters to work with, so choose your wording wisely. Detailed, recognizable descriptions will help to remove any ambiguity or confusion around a purchase.

 

2. Use a payment processor that provides notifications

If you work with a trusted payment processing company [link to blog] they will usually provide real time notifications of chargeback requests. Addressing these issues as quickly as possible will not only improve your standing with your customers, but will leave them more satisfied with your customer service and more likely to return.

 

3. Make sure your employees know how to manage all transactions

A well trained employee should know how to handle all forms of transactions accurately and completely. This means knowing how to properly manage both card-present and card-not-present transactions, verifying signatures, and logging and organizing purchase information correctly. If employees are thorough with managing payments, complications with chargebacks will be less likely.

 

4. Prevent future chargebacks

Your employees should also know what to look for to identify credit card fraud and abuse, and what to do to prevent it.

Most importantly, you should have a reputable payment processing provider in place who can identify fraudulent behavior, offer customizable options to only let certain purchases be automatically approved, and even cover chargeback losses up to a certain amount.

 

East Commerce solutions offers a wide variety of payment processing products and services, as well as customized security solutions, including credit card chargeback prevention, for businesses of any size. Take a look at our blog here to read more about how we’re helping retail, food service, and e-commerce organizations do business more smoothly and securely.