Most payment chargebacks happen when a credit card owner requests for a reversal of a transaction mainly due to fraud. This can only happen when the transaction has already been completed. The only person that has the right to request for a chargeback is the individual who funds the credit or debit card.
- There are so many reasons aside from fraud that may cause a reversal of a transaction. This happen mostly when a credit card holder is purchasing goods online and;
- The purchased item never arrives,
- The credit card is used without the authorization of the user,
- The item that is ship ends up being significantly different from the one that had been advertised.
There are other reasons that may cause a reversal of a transaction. For example, technical errors such as an expired authorization or bank processing errors that may cause a card holder to be charged more than twice for a single transaction.
It could also happen due to a clerical error. This is where a billing is duplicated or perhaps, the amount of money billed is incorrect. A merchant will also have the right to request for a payment chargeback if a refund had not been issued.
How to avoid payment chargebacks
- Always get you billing address right.
- Always confirm the card holder’s signature against the signature on the card. This also applies to the name of the card holder against his driving license.
- If you find that a card is expired or declined then, always reject it in order for you to avoid the possibility of a chargeback.
- Electronic authorization should make your work simpler and more efficient.
- Your merchant information should always receive clear and timely information from you regarding any transaction conducted.
- In case a refund is needed, it should be issued on time.
Why it is important to avoid chargebacks
As a merchant, it is important to avoid chargeback whenever you can. This is because your business depends on it as well as the relationships between you and your merchant bank and you and your customers.
Ideally, without this option for credit and debit card holders, they will often be victims of scams anytime they purpose to purchase an item especially online. It provides an opportunity for merchants to always ensure that they provide quality products to their clients. They will also be able to provide helpful customer service and timely refunds as appropriate.
Furthermore, a credit card holder also gets a means to revers a transaction that they did not authorize. A chargeback may also be authorized if a consumer attempts to fraudulently reverse the charges that he had already authorized hence protecting the merchant from fraudulent consumers.
Jean Wellard is a freelance writer who also operates his own online store. He is experienced in the complex world of online payment (more articles) and knows what merchants should do to stay protected. Jean is also interested in many small business ventures.