What is a Chargeback?
A chargeback, also referred to as a dispute, occurs when a cardholder challenges a specific transaction with their bank. This option is made available for all cardholders by banks in order to protect them unauthorized transactions.
This issue usually takes a few weeks to resolve. It can involve a lot of supporting documentation on the merchant’s side. You can typically expect a resolution between 4-6 weeks.
Why File Chargebacks?
There are many reasons a cardholder would file a dispute, but one of the most common reasons is that they are unfamiliar with the charge, and believe it could possibly be fraudulent. A cardholder may also file a chargeback if they feel they did not receive the product or service they paid for.
How Can I Help Limit Chargebacks?
This is what shows up on a customer’s bank statement. Many chargebacks are a result of an unfamiliar charge. You want to make sure this field is easy and recognizable for customers.
If a customer calls to inquire about a charge or possible refund, be sure to have a conversation with them. Review their request promptly and let them know if the charge was legitimate, or if you are able to provide a refund if necessary. If not, it is a good idea to make them aware of your refund policy.
I Have a Chargeback. Now what?
You will be notified that a cardholder filed a dispute either by mail, email, or fax, depending on how your processor notifies their merchants. It is important to respond to the notification with all requested documentation in a timely manner. Some documentation the chargeback department may ask for is a receipt, invoice, and your return policy.
If you have any questions about chargebacks and how your processing company handles them, it is best to reach out to your merchant services provider directly. You will likely be directed to a chargeback department where they specialize in this issue, and should be able to provide you all the information you need.