With all of the preparation, problem solving, and management involved in having an eCommerce store, there is one precaution that is grossly overlooked which has the potential of creating huge problems. Credit card chargebacks were created to protect cardholders from unauthorized transactions, and they make it possible for customers to refuse payment for goods or services based on the claim that the services were not received or goods were never delivered. Credit card institutions may also approve chargebacks based on damaged items and items that are not what they were claimed to be, even if the items were never returned to the vendor. As a result, a few customers regularly abuse the system in hopes of receiving products for free. Naturally, this greatly impacts those in the business of online sales by suddenly removing funds that are already collected, thus these entities must take care to utilize certain protocol to prevent as many chargebacks as possible.

It is extremely important for an eCommerce website to exercise extreme clarity in regards to shipping information, products, and checkout. It is imperative that the customer is aware of how the charge will appear on their card statement. Some customers mistakenly submit a fraudulent charge claim because they did not recognize the charge. Another way to prevent such confusion is to send automatic follow-up emails reminding customers that their card will be charged. These emails are also an appropriate time to reiterate to the customer that they are welcome to call you with any questions concerning this order. The business telephone number should appear clearly on the website as well as on the actual credit card charge. This allows customers to easily call to verify the charge without having to research what the charge might have been.

Pre-ordered items should not be charged to credit cards in advance. The time in which it takes to receive the item in stock may give the customer time to change their mind or simply claim a false charge on the grounds that no items were shipped. Instead, wait until the item is in stock and ready to be shipped before charging a customer’s credit card.

Getting rid of mistaken charges quickly is also a valuable policy for eCommerce. Not only does this avoid confusion and assure the customer that you will not be keeping the money, but it will also build your reputation as a professional and organized establishment. If a mistaken charge is not quickly voided, the customer is likely to take matters into their own hands by simply requesting a chargeback. If a customer reports a mistaken charge, you must never put off responding. It is imperative that you send an immediate response at least to let the customer know you are looking into the matter and will correct it as soon as possible.

The basic idea of preventing chargebacks is to have professional quality control and customer service policies that deal with the problem before a customer has time to consider disputing the charge with their credit card institution. It is much better to deal with these issues with customers directly, both for your future business and for your credit and legal integrity.

Merchant accounts make it possible for businesses to provide online credit card processing. For more information on credit card processing visit www.stradafee.com.

As an internet retailer, one of the most terribly annoying aspects you will (there is no might) have to deal with are chargebacks. A chargeback occurs in any number of situations where a customer makes a claim to their credit card company or bank in order to receive their funds back after a purchase. As a merchant, not only will you be out of the initial purchase funds and possibly the product as well, you will also be charged a percentage-based fee on top of that, according to your electronic payment company’s policy guidelines, to pay for the hassle of refunding funds. Ideally, of course, merchants want to keep these situations to a minimum and by following several guidelines, chargebacks can be of rarer occurance. This article will discuss what to do when disputes are attempted against you; a successive article will discuss how to protect yourself (and your business) initially against chargeback attempts.

Trying to get something for nothing is not a new phenomenon of course. When a patron attempts this at your brick and mortar storefront, we call it shoplifting. How is it any different when a would-be purchaser attempts this very thing in various ways through your electronic gateway? Perhaps credit card companies, with their all-inclusive fraud protection policies are actually contributing to the problem by adopting a “don’t ask, customer is always right” approach; allowing customers to feel entitled to dispute any charge, knowing that their credit card company has promised to “have their back”. How can individual, small-business merchants compete with disputes rendered through large credit card companies? Most merchants believe there is nothing they can do, and this is where they are wrong. An internet retailer owes it to him or herself to voraciously defend every purchase made, because every piece of inventory and revenue lost to fraud can add up. Merchants must immediately dispute the chargeback with the bank upon first notice. Keep track of all purchase information. Email correspondence or phone conversations should be readily available as proof that a legitimate purchase was indeed attempted and made. Shipping details should be in order including confirmation of delivery for those pesky customers that might claim to have not received the product. If this initial dispute fails, you must be prepared to seek retribution from the consumer for the initial purchase fee, as well as any added fees incurred in the process. Because your bank will require you foot the bill for illegitimate purchases, you must be willing to weigh your time and effort against the compensation you might gain in a successful dispute.

Choosing an electronic payment company that uses all available tools to protect you and other clientele from internet fraud is extremely important.

Merchant accounts make it possible for businesses to provide online credit card processing. For more information on credit card processing visit www.stradafee.com.

Any kind of business that accepts credit card payments is aware that chargebacks are a fact of life. Sooner or later it is going to happen. Most often a chargeback occurs when a card holder who is dissatisfied or does not receive a merchant’s product or service and disputes that debit on their credit card bill. Other reasons could include an incorrect or double charge on the card, an expired card, or a bank error. The card issuer then bills the amount back to the merchant. An excessive amount of chargebacks can seriously impact a business’s future by incurring additional fees which could wipe out profits, as well as the possibility of losing the merchant account all together. Once the merchant account has been terminated it may be considerably difficult to obtain another merchant account.

Adhering to credit card acceptance guidelines is the best defence against fraud. When conducting transactions face to face merchants should examine cards carefully. Ensure the identity of the card holder by requesting other forms of photo ID, such as a driver’s license, passport, or another credit card. Inspect cards for signs of fraud. Know where to look for built in security features such as microprinting, embossing, and features only visible under ultraviolet lighting. Make sure the embossed account numbers on the card match with the numbers on the monitor, and that the customers signature matches with the one on the back of the card. If the card is not signed or is expired refuse to accept it. Take extra time to scrutinize suspicious transactions, such as a pushy customer at the end of the day unable to verify his or her identity. Use address verification services (AVS) for online credit card processing and confirm the 3 digit security code found on the back of the card.

Make sure customers fully understand the service contracts or the products they are purchasing, as well as return and exchange policies. Include a copy of the policy with the sales draft and have the customer sign it. Let them know how the charge will appear on their credit card statement as well.

Dealing with charge backs can eat up hours of your time. In the event of a chargeback, contact the card holder’s bank and determine the reason for dispute. Promptly gather all information about the sale and prepare a written statement detailing the transaction. If everything is in order the customer should be liable for the sale. If there was a problem with the product or service arrange for return or exchange and issue a credit to the customer’s account. For mistakes at point of sale also issue a credit. Following these guidelines should help you reduce and manage the dreaded chargebacks.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

Chargeback, it’s not a matter of if but when you’ll get them. A big misunderstanding that merchants make is that they won’t have them. That is a pretty big lie to tell yourself. Whether you’re a Card Present vendor, operating a sporting goods store or a strictly E-commerce business, you’ll have chargebacks on your settlement statement. Today, with as much fraud in the marketplace as there is, business owners need to watch their statements closely and be diligent to avoid chargebacks whenever possible.

Chargebacks stem from a number of sources. Probably the most common type of chargeback is a customer dispute. It happens; customers aren’t satisfied with a product or service and wish to get their money back. Most often, they’ll contact the merchant for a refund or some sort of compensation; the concept that the customer is always right, causes more problems than ever these days. If the merchant feels that they have fulfilled their responsibilities and cannot come to terms with the consumer, then usually, the consumer goes directly to their issuing bank that the charge was made on to dispute a charge. This is often done while the customer still has the merchandise or has been rendered the services. From there, the bank will contact the merchant to basically get their side of the story. If you, the merchant has taken notes, has good records of their transactions and has dealt or spoken to the disputing customer directly, this can be a saving grace for you and save a chargeback. A lot of times, in big organizations, this is not the case, and banks tend to charge back merchants more easily as there’s a long and inconsistent trail knowledge of the original transaction. If you have a customer service department, in-house customer dispute resolution and good call logs will help if chargebacks occur. The underlying moral her is, “Resolve your customer’s issues while you can.” You’ll save a chargeback and may save future business.

Another cause of chargebacks are Procesing Errors. These are usually the merchants fault; double processing single transactions or entire batches through the same or different banks happen more than you think. Be thorough, this is your business. Processors make mistakes too, make it a point once a month to reconcile your Settlement Statements and always take every chargeback seriously, every chargeback does count. Many times, merchants won’t be contacted about their chargebacks, as they stem from the issuing bank to the merchant bank; usually the type of chargeback delegates the merchant participation. Typically, your merchant bank will contact you about a customer dispute. Also, stay on top of pending chargebacks (investigations) or customer disputes, there is a time limit; if not responded to in a certain timeframe by you or the merchant bank, issuing banks will issue the chargeback and their decision is final.

Fraudulent charges are commonplace today; they’re a huge pitfall and merchants need to always be vigilant. Identity theft is not going to decrease and the criminals that perpetrate these types of crimes are getting smarter. These types of chargebacks usually stem from Card Not Present Transactions where a charge is called in or made via the internet. To help prevent fraudulent activity, requesting additional card or cardholder information prior to card authorization can weed out the bad cards. Card control numbers or CVV2 on the front or back of the card (front for AMEX, back for MC and VISA) mean that the cardholder is in possession of and looking at the card at the time of purchase. Billing information requests and requiring that merchandise is shipped to the billing address are a help too.

While most businesses have direct capture, in that the charge is made at the point of sale; some businesses preauthorize transactions and utilize third-party fraud scrubbing agencies to settle their accounts before the funds are captured. This is sometimes done out of sheer diligence and other times is a necessity for the merchant to process credit cards. Either way, third-party fraud scrubbing and other services like 3 D secure processing and AVS and CVV2 are offered by merchant service providers. You are not going to eliminate chargebacks or fraud, but diligence, good transaction protocol and accurate record keeping can lessen the time you spend fixing problems that you could have easily avoided.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!

A chargeback is a forced reversal of payment in a merchant’s account. In other words, a chargeback occurs when a payment for a product or service by a customer is reversed and the merchant’s account is deducted with the amount of a payment already made. Chargebacks can occur on account of a customer disputing a credit card charge or in case there is a technical error, such as the merchant not supplying the original bill of sale to the issuing bank. The chargeback will not immediately result in a reversal of merchant funds, and the charge will have to be proven by the customer and vice versa. For instance, if a customer claims that the product shipped is not what he or she ordered, the customer will have to prove that the product that was shipped and ordered are substantially different. In return, the merchant will need to prove that the product shipped is the same and there are no material differences.

Chargebacks can occur due to several reasons including the following major ones:

• Dual processing- when a customer is charged twice for the same order

• Defective- When the shipped product or service is defective (damaged or broken) and does not perform the purported functions as claimed by the merchant. In addition, if there is a substantial difference between the performance as promised and delivered.

• Not shipped- A customer may claim that the order shipment was not fulfilled.

• Unauthorized activity: A customer may claim that the transaction in question is either in error or not conducted by him or her at all, indicating fraud.

A charge back request must be initiated at customer’s end.

The typical process for a chargeback is as follows:

1. A customer complains to his or her credit card issuing bank about a specific transaction.

2. The credit card issuing bank registers the complaint and issues a recovery request to the acquiring bank. Along with the complaint, information relating to the transaction such as date of transaction, amount, reason for complaint (duplicate processing, etc.) must also be supplied.

3. In some specific cases when a customer report of non involvement in some specific transaction charged in his account, the credit card issuing bank can straight away issues a notification for chargeback.

4. The Acquirer forwards the recovery request to the merchant account service provider, or in case of a third party processor, the processor informs the merchant about the charge back complaint filed against him. Some third party processors such as PayPal allow the customer to check the status of the chargeback request anytime at their online “Resolution Center.”

5. The merchant account service provider marks the transaction as ‘disputed’ and forwards the recovery request to the merchant. Some merchant account providers or third processors may deduct the amount of the transaction from the merchant’s account freeze it at the merchant account provider or third party processor’s end. However, this amount will not yet be transferred to the end customer.

6. The merchant will now need to prove the legitimacy of the transaction, either through the presentation of the original credit card sales invoice or charge slip with the customer’s signature. In addition, the merchant may show delivery receipts or other documentation (product details as offered to customers), depending on the cause of the chargeback request.

7. The merchant account service provider will the review the provided documentation. If it appears that there is no fault on part of the merchant, the information will forwarded to the acquirer and the amount is added back into the merchant’s account, and vice versa. However, in case the service provider adjudicates that the merchant is not at fault, the end customer may choose not to accept this verdict and send a chargeback request for a second presentment, to which a reply needs to be provided within 45 days (usually in case of MasterCard and Visa). The exact time frame varies with different service providers as well as the cause of the chargeback request.

8. In case of 2nd presentment, the acquiring bank will need to mediate for arbitration, for which both the customer and merchant will have to file a request. At this stage, the final decision as to the chargeback will rest with the acquirer.

Chargeback communication including recovery requests are transmitted based on “reason codes,” which carry information as to the reason of request as well as the status of the chargeback.

For more information on echeck processing, high risk merchant accounts and online credit card processing. please visit www.stradafee.com!