Chargeback meaning12/10/2023 ![]() Website or apps: this is where you’ll find terms and conditions, plus screenshots of how your product or service is presented to the customer Typical places to gather evidence include:ĬRM software (eg Hubspot or Salesforce): here you should be able to find customer information, product/service details and browser information If a customer claims merchandise differs from the description, provide evidence of clear and detailed product descriptions.Įvidence will likely be stored in different places across your organisation. If a customer claims they were charged multiple times, look for that customer’s transaction history. If a customer claims a product was never delivered, find proof of delivery. With the reason code giving you the cause of a chargeback, you now need to gather all the information you have on that particular transaction, so you can find evidence that contradicts that reason code. Midigator has an extensive database of chargeback codes. Visa and Mastercard have their own exact reason codes, but all will give you information on why the customer requested the chargeback, including customer disputes, fraud, authorisation errors and processing errors. The next step is to check the reason code for the chargeback. Late reversal submissions will be automatically rejected by the issuing bank, regardless of how strong your case is. Flag and analyse chargebacks quicklyĬhargebacks are typically sent to your business by email or post and come with strict deadlines for submitting a case for reversal - often 30-45 days - so it’s important to spot these notifications quickly and start uncovering the details of the transaction. ![]() That was a valid chargeback request, and submitting representment will only make it more difficult to persuade the issuing bank in the future. When reviewing a chargeback, can you see that any of the above did happen? If so, don’t fight the chargeback request. The seller has gone out of business, and so the customer cannot request a refund Merchandise or service differs from the description The cardholder doesn’t recognise the transaction There are several reasons why a customer can make a chargeback request, including:Ĭard processing errors, such as being charged multiple times for the same purchase Only pick chargebacks that are clearly unfair In order to be successful in your pursuit of a chargeback reversal, it can be useful to follow some straightforward tactics: 1. Tips for successful chargeback representment and reversals. So representment is an important skill for businesses to master. Having a high chargeback rate can lead to further consequences for merchants, as they may be subject to penalties and monitoring programmes by card schemes, such as Visa and Mastercard, if their chargeback rate exceeds 0.9%. It’s important to note that, even if a chargeback is successfully reversed, the merchant is still liable to pay the chargeback fee, which is usually around £10-20. It is then up to the bank to decide whether to honour the chargeback or issue a reversal. Representment involves a merchant gathering all available information on the disputed transaction, such as receipts, delivery confirmations and any other documentation, which together can prove the transaction didn’t warrant a chargeback. If the merchant has reason to believe the chargeback reason is invalid, they are permitted to dispute the chargeback through a process called representment. The merchant is then presented with the option of examining their records to see if the reason code for the chargeback is valid. If a bank decides to file a chargeback, they will notify the merchant via their acquirer. In fact, it’s estimated that as much as 86% of chargebacks are probable cases of fraud. Unfortunately, this low barrier means chargeback fraud or friendly fraud happens regularly. When a customer disputes a charge, banks tend to favour customers over merchants, even though the consumer is meant to provide evidence in support of the chargeback. The transaction funds will then be returned to the merchant. What is a chargeback reversal?Ī chargeback reversal is when an issuing bank decides that, on balance and after investigation, a chargeback was either unfair or fraudulent. Wondering what a chargeback is? Read our guide on how to reduce chargebacks first. Give your organisation the best chance of successfully overturning unfair chargeback requests, by better understanding the reversal process, along with tactics to ensure issuing banks - who ultimately cast the final judgement - look favourably on your case. Chargeback reversals can be a complex affair, requiring merchants to have detailed evidence to hand, as well as time and resources to make their case to the banks.
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