Receiving a credit card processing chargeback can be stressful, but understanding the process and knowing how to respond can help you manage it effectively.
First and foremost, its important to understand that your credit card processor cannot protect you against a chargeback and your processor in no way can control that that money was taken back from your business.
Here’s a breakdown of the chargeback process, who initiates it, and steps you can take to fight and win the chargeback:
Chargeback Process
- Initiation: The chargeback process begins when a cardholder disputes a charge with their issuing bank or the credit card issuer. This could be due to various reasons such as fraud, dissatisfaction with the product or service, or not recognizing the transaction.
- Review by Issuing Bank: The issuing bank reviews the dispute. If they find it valid, they reverse the transaction and deduct the amount from your account. You are then notified of the chargeback.
- Notification: You receive a chargeback notice from your acquiring bank or payment processor. This notice includes details about the disputed transaction and the reason for the chargeback.
- Response: You can either accept the chargeback or dispute it. If you choose to dispute it, you need to provide compelling evidence to prove the transaction was legitimate.
- Resolution: The issuing bank reviews the evidence you provide. If they rule in your favor, the funds are returned to your account. If not, the chargeback stands and the funds will remain with the customer.
Who Initiates the Chargeback?
The chargeback is initiated by the cardholder (your customer) when they contact their issuing bank to dispute a charge.
Steps to Fight and Win a Chargeback
- Review the Chargeback Notice: Carefully read the chargeback notice to understand the reason for the dispute and the deadline for your response.
- Call Elevated Payment Solutions: Give us a call to discuss how we can help you combat the chargeback. While there is no guarantee we will be able to retrieve your funds, our experts have been partnering with our clients to fight chargebacks for over 15 years. Worry less and let us help you through this stressful process.
- Gather Evidence: Collect all relevant documentation, such as transaction receipts, delivery confirmations, communication records with the customer, and any other proof that supports the legitimacy of the transaction. The more information you have the better. A signed quote, or invoice, a copy of the drivers license of the customer or both is a bulletproof way to combat a chargeback.
- Submit a Rebuttal Letter: Write a detailed rebuttal letter explaining why the chargeback is invalid. Include all the evidence you have gathered.
- Follow Submission Guidelines: Ensure you follow the specific submission guidelines provided by your acquiring bank or payment processor, including formats and deadlines. Typically you will need to respond within 15 days or you will default on the chargeback.
- Maintain Records: Keep thorough records of all transactions and communications with customers to support your case in the event of a chargeback.
- Monitor the Outcome: After submitting your evidence, monitor the outcome of the dispute. If the ruling is in your favor, the funds will be returned to your account.
Tips for Preventing Future Chargebacks
- Clear Communication: Ensure clear and transparent communication with your customers regarding your products, services, and policies.
- Detailed Documentation: Maintain detailed records of all transactions and communications.
- Fraud Prevention: Implement robust fraud prevention measures to reduce the risk of fraudulent transactions.
By understanding the chargeback process and taking proactive steps, you can better manage and potentially win chargeback disputes. If you need more specific advice or assistance, feel free to call Elevated Payment Solutions and we will be happy to walk you through what to do when you receive a chargeback.
