Chargeback management is combined of two complementary and supporting processes:
Here are our tips for reducing and fighting chargebacks:
Do your best to avoid chargebacks – Customer Service
The main two words here are Customer Service.
The better your customer service is – the better your chances to solve problems with your clients and avoid chargebacks.
Clients will typically issue a chargeback when they feel they have no one to talk to, that no one is listening and addressing their claims, and that their funds are lost because of it.
This can be solved by a few simple steps:
Rule of thumb is that is it always better to refund a client than to dispute a chargeback.
If you find your client’s claim to be legit – refund him as requested.
If you find your client’s claim to be without merits – check how good your dispute can be in case of a chargeback. If you think your documents are lacking and your chances are slim, it’s better to refund the client and claim the loss of funds, than risk a chargeback. But if you think you stand a good chance of winning a dispute – go ahead.
Good Document Collection
We have said it before, and we will say it again. We are even willing to shout it from every rooftop: Good Document Collection is KEY.
If your client allowed another to use his card you need to have a signed document stating his approval clearly.
If your client is using a business card, make sure that you have a document from the business allowing him to use the card for such a purpose.
Merchants usually have a short period of time to respond to retrievals and chargebacks, in many cases several days.
If you maintained good document collection practice, there’s no reason to wait.
Prepare your dispute as soon as you can and send it, to make sure that your dispute will reach the issuers in time.
If you don’t already have our dispute form, please contact email@example.com, and they will gladly send it to you.
Fill the transactions details as best you can.
That part of the form summarizes the details of the transactions you are fighting for.
The more details you have – the easier it will be for the acquirer and the issuer to locate the transactions and know exactly what you are referring to.
Check Reason Code
In the notification you receive from us, you get the reason code as well as the reason description.
This is the reason the client asked for the CB – this is what you need to counter.
It is crucial that you check the reason code to know which documents to attach to your dispute.
Tell your story
You need to explain why you are fighting.
The workers handling the disputes within acquirers and Issuers are not mind readers. You need to tell them why you believe you should not have received the chargeback, and why you think they should end the process and return the funds to you.
The better you explain – the easier it will be for them to understand the situation.
However, it is easy to fall into a trap of infusing emotions into the case, especially when high volumes are involved. It is important to remain professional and void of emotions in the dispute letter.
Attach Relevant Documents
A retrieval is when your client contacted the issuer and asked about the transaction/s.
This means he is unsure about the transactions, if he made them, what they are for.
You can contact your client at this stage to see if there’s a problem you may fix.
You can refund the transaction at this stage to try and avoid a coming CB.
Or you can send a dispute.
If you choose to dispute you should attach to your dispute these documents:
There are different reasons for chargebacks, but you can divide them into two main groups: Fraud chargebacks and service chargebacks.
Fraud chargebacks are when the client declines the transactions, claiming he didn’t authorize them and that he doesn’t recognize them.
In these instances you need to prove that the client is indeed the card holder, and that he indeed approved the transactions.
To do that you need to send:
Service chargebacks are made when your client is dis-satisfied with the service you provided. This could be the trading itself, refunds that he asked for and did not receive, miscommunications and more.
In these instances you need to prove that the services you provided are exactly why you were obligated to provide, what was described on your website.
To do that you need to send:
For specific CB reasons (30, 53, 83, 4837) you really want to submit compelling evidence.
Compelling evidence compels the issuer to contact the cardholder, review the evidence with them and have them sign a form they are still declining the transactions. This form must be presented in the pre-arbitration stage, if they choose to go to it.
The compelling evidence should prove a link between the person receiving the service and the cardholder.
They MUST be submitted at the representment stage. If they are submitted at any other stage they are not considered compelling anymore.
These are the documents you can add as compelling evidence for these reason codes:
Visa Chargeback Reason Codes for Compelling Evidence:
30 – Services Not Provided or Merchandise Not Received
53 – Not As Described or Defective Merchandise
83 – Fraud – Card Not Present Environment
30, 53, 83:
For an eCommerce transaction representing the sale of digital goods downloaded from a merchant’s website or application, description of the goods or services successfully downloaded, the date and time such goods or services were downloaded, and two or more of the following types of evidence:
• Purchaser’s IP address and the device’s geographical location at the date and time of the transaction
• Device ID number and name (if available)
• Purchaser’s name and email address linked to the customer profile on record with the merchant
• Evidence that the account set up on the merchant’s website or application was accessed by the cardholder and successfully verified by the merchant before the transaction date
• Proof that the merchant’s website or application was accessed by the cardholder for goods or services on or after the transaction date
• Evidence that the device and card used in the disputed transaction were the same as in any previous, undisputed transactions
For a transaction in which merchandise was delivered to a business address, evidence that the merchandise was delivered and that, at the time of delivery, the cardholder was employed or is working for the company at the address. A signature is not required as evidence of delivery.
Evidence that the person who signed for the merchandise was authorized to sign for the cardholder or is known by the cardholder.
Evidence of one or more undisputed payments for the same merchandise or service.
For a recurring transaction, all of the following:
• Evidence of a legally binding contract held between the merchant and the cardholder
• Proof the cardholder is using the merchandise or services
• Evidence of a previous, undisputed transaction
MasterCard Chargeback Reason Codes for Compelling Evidence (4837):
For non–face-to-face recurring transactions only.
A merchant statement documenting all of the following:
For e-commerce, mail order, and telephone order transactions only.
At least one of the following documents, accompanied by an explanation thereof if necessary:
Copied from Master card: http://www.mastercard.com/us/merchant/pdf/TB_CB_Manual.pdf
Give It All You’ve Got
The chargeback process is a long and complicated one.
The best recourse is to try and shorten it as best we can, and to avoid moving forward to higher steps such as 2nd chargeback, pre-arbitration and arbitration.
For that reason we recommend that you include everything you have in the dispute – as long as it is related to the case – and present the best case you can present.
Please keep in mind, though, that you ARE limited in file size.
If you send a PDF file it should not be larger than 2MB.
If you send a WORD file it should not be larger than 8MB.
We share a common goal of reducing chargebacks in the accounts.
But when you do receive a chargeback, we want you to be able to present the best dispute possible, and have the best chances of recovering your funds.
This article was written by admin_algocharge