CREDIT CARD CHARGEBACK

In a business environment, the word chargeback is the most feared word by merchants. When a particular transaction gets reversed, it is known as a chargeback. It simply means that a chargeback deducts money from the account rather than adding to the account. There are several reasons why a chargeback can occur. It could be because of customer disputes, bank error, expiration of credit card and double-charging. If there are several chargebacks against a merchant, there are possibilities that one could loose their merchant account. Once a trader looses a merchant account, his/her name is listed in a MATCH list of the Visa/MasterCard for many years. This list can be accessed by all account providers. If the providers find a merchant’s name on this list, they do not reissue another merchant account to the trader.

Following are a few tips that will help a trader reduce chargebacks:

-      On the page where the order confirmation exists, company details such name, e-mail address, phone number, etc. should be provided to the customer. This helps the customer recognize these details when they appear on the monthly statement of the credit card.

-      These details of the company should also be included in the confirmation e-mail which is sent to the customer when they place an order.

-      It is also advisable to use the service “Address Verification”. All those who order products with the help of a stolen credit-card number won’t use the billing address of the real card holder. By using the Address Verification, a merchant has a chance to prevent an order form being sent.

-      It is always better to scrutinize orders which come from overseas. A high percentage of false online purchases come from countries such as Russia, Indonesia, and other developing nations.

-      If the order appears suspicious, then send an e-mail or make a call to the purchaser in order to verify the details. Follow up if certain orders seem strange.

-      It is advisable to include the customer’s invoice if an order is being shipped. Copies of the customer invoices must be kept is that is ever a challenge is imposed, the merchant has something to defend himself.

-      Care must be taken before orders are accepted from all those who use free e-mail addresses while placing orders. This is because it is next to impossible to track the users of free e-mail addresses. It is always easier to people to get away when an e-mail address of an Internet Service Provider is used.

-      It is better to request for the three digit security code of the credit card (CVC or CVV) which is present at the reverse side of a credit card.

-      If the business requires delivering orders, it is advisable to use carriers which require a signature after the delivery is done. Also, these copies must be kept for the records.

-      Warning messages must be posted in the order page so that fraudulent order attempters are kept at bay.

The above listed measures help in reducing the credit card chargebacks.