Chargeback Prevention

chargeback

InfinitePays has an in-house Chargeback department ready to assist you with customer disputes and managing your risk. The most common reasons for chargebacks are results of returned merchandise, terminated services, disputes, errors or fraud. Here are some useful tips to assist you in minimizing the potential for customer disputes that can result in a chargeback:

Tips For Sales Transactions:

  • Process a Settlement at least once a day, every day when you have a transaction
  • Obtain a manual imprint of the credit card especially if the card cannot be read by the magnetic reader or Chip reader on the credit card machine
  • Promptly process refunds
  • Keep a record of shipping history; POD (proof of delivery)
  • Keep a list of bad customers to identify high risk order
  • Visibly post return or refund policies at your business

Tips For Sales Receipts:

  • Obtain customer’s signatures (except for MO/TO or Online)
  • Keep copies of all Sales Receipts for at least 24 months
  • Sales Receipts should be filed by date order
  • 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; routinely change ink cartridges or use premium receipt paper
  • Sales receipts should reflect your business name exactly as it appears on your signage
  • Immediately ship products and if you offer delayed delivery then indicate it on the sales receipt
  • If offering installment payments or prepayments, then make sure the terms are clearly expressed in writing and include the shipping and tax charges, if any.

FAQS:

How long does a cardholder have to dispute a charge and are there any exceptions to the timeframe?
For most disputes the time frame is 120 days (U.S.) and 180 days (International) from the transaction date of the original sale or the date of discovery of the issue (i.e., defective merchandise). However, in some instances the time frame may be longer or shorter depending on the specific reason code.

Why do I have to pay a chargeback fee when the transaction is valid and the customer is the one who initiated the chargeback?
The chargeback fee is applied to all chargebacks received regardless of the outcome of the case. This fee covers the administrative costs associated with processing the chargeback.

How can I get a chargeback when I received an approval code on the transaction?
An authorization code simply verifies that the card is in good standing, has not been reported lost or stolen at the time of the transaction, and has sufficient funds available for the amount of the transaction you are attempting to process. An authorization code does not guarantee that you will not receive a chargeback.

Why isn’t there a cardholder name on the documents I received?
Issuing banks are not required to provide a cardholder name to the acquirer or the merchant. On some chargeback reason codes the cardholder name might be found within the supporting documentation; however, not all reason code require the issuer to supply supporting documentation. A cardholder name is never provided by the issuer on a copy request/retrieval.

Where is it documented that I cannot charge for loss, theft, or damage?
The Visa® and MasterCard® Regulations state that delayed or amended charges must be processed as a separate transaction and that the cardholder must authorize the additional charges after being informed of the loss, theft, or damage.

Why does the transaction get an approval code if there is a negative AVS or CVV response?
AVS and CVV are tools designed to help the merchant make the best possible decision when accepting a transaction. If you get a negative CVV/CVC or AVS response, you should review the transaction in its entirety to determine if you want to continue with the sale regardless of whether or not you received an authorization code. Negative responses on CVV/CVC or AVS can be an indicator of potential fraud.

Why do I have to wait so long for an answer to Arbitration, Compliance, and Good Faith?
Specified time frames are allotted by Visa/MasterCard for each step of the process. This allows the merchant’s processor and the cardholder’s bank to obtain and submit appropriate documentation to be reviewed in each case. Elavon and the issuing bank have no control over the length of time it takes for Visa or MasterCard to rule on a case. Good faith collection cases are not governed by Visa or MasterCard and therefore no time frames for responses have been set by the associations.

Why did you debit my account without notifying me first?
When the chargeback is initiated by the card issuing bank and sent to FD an automatic debit follows. This debit is passed to the merchant as long as the issuer has met all of the association requirements for the particular reason code they used to process the chargeback. This is in accordance with your merchant agreement and the terms of service which you signed and/or received during the initial sign-up and activation of your account.

Why are you taking the cardholder’s side without getting my side of the story?
InfinitePays has no interaction with any cardholder who may be disputing charges. InfinitePays represents you, the merchant, and assists you in providing the correct information on any dispute you might receive. Our goal is to help you resolve these disputes in your favor. However, all remedies to a chargeback must be in compliance with the Visa and MasterCard rules and regulations.

How can I protect myself from chargebacks on special ordered items that require a deposit or re-stocking fees if a customer decides later they do not want the item?
A merchant’s best defense is to ensure they obtain cardholder signatures for all transactions and properly document and have the cardholder sign the cancellation/return policy on any order. It is also very important to manage the customer’s expectations upfront, document your efforts and work directly with the cardholder to resolve misunderstandings or conflicts.