Last Updated on June 21, 2022 by
How to Fight Wrongful Chargeback Claims
First, try to repair the Issue Through Customer Service. The most effective method of dispute resolution occurs before the chargeback process, and it involves resolving the claim between the merchant and the cardholder. Instead of initiating the laborious review system, attempt to prevent the customer dispute through refunds, store credits, or other client-centric options. This practice is very useful for chargeback claims of small monetary amounts.
Second, use Merchant Purchase Inquiries. Some credit cards offer fast-tracked dispute resolution for businesses that prevent the chargeback process where you can supply additional information such as transactions records or receipts before an official review, helping eliminate many chargebacks made in error.
Third, collect a Burden of Proof: Any collected records you provide that prove the legitimacy of your sale will weigh heavily in your favour. New software integrations and point-of-sale systems collect data such as IP addresses and delivery notifications that help you win your case with a credit-card association.
Fourth, create a Reason Code Template: Chargeback reason codes classify each disputed claim to make the review process easy for all involved. Examples include “No Valid Authorization”, “No Receipt Signatures”, or “ EMV Counterfeit”. Creating paperwork according to reason codes allows you to send the right information to fight your claim (e.g. if the reason for the dispute is a missed delivery, send tracking codes).
Finally, submit Chargeback Evidence: Once you submit your evidence to either the issuing bank or credit card, the rest of the ruling process is out of your control. You can pursue arbitration if the review process is deemed unfair, and you can elevate large chargeback fraud into the courts of your jurisdiction for more aggressive dispute resolution.
Do Customers Always Win Chargeback Fraud Claims?
Fighting chargebacks do cost your time, effort, and expense, but the process is designed as a fair system — you have a good chance of winning a fraud claim if you collect and present a wealth of pertinent information. Compelling and direct evidence that demonstrates a faulty claim has a high probability of winning a dispute. Maintain all deadlines, and take advantage of any software applications that can collect the needed data, helping to lower your costs while offering comprehensive customer reports for evidence.
Attempt to keep your chargeback ratio at 1% — anything above that will label you as a high risk. Take proactive steps to help limit the three types of chargeback fraud, as neither you, the customer, the credit card, or financial service want the chargeback process to even begin. Overt fraud prevention helps increase brand trust, customer engagement, e-commerce security, and will protect your bottom line from aggressive fees and dispute costs. If a chargeback claim does occur, take the necessary steps to provide evidence to your case, as clear proof can result in a winning dispute. If a business error occurs and you know you will lose any chargeback claims, attempt to resolve the issue before beginning the chargeback process, saving time and expense.
