Chargebacks

Chargebacks are the return of funds to a customer initiated by the card-issuing bank usually as the result of returned merchandise, terminated services, disputes, errors, or fraud. Here are some useful tips to assist you in minimizing the potential for customer disputes that can result in a chargeback: 

For All Sales Transactions:

  • Process a Settlement at least once a day, every day when you have a transaction
  • Obtain a manual imprint of the credit card especially if the card cannot be read by the magnetic reader on the credit card machine
  • Promptly process refunds
  • Keep a record of shipping history; POD (proof of delivery)
  • Keep a list of bad customers to identify high risk orders
  • Visibly post return or refund policies at your business, on receipts, and website.
  • Call Voice Authorization and request a “Code 10” on suspicious transactions and see additional Fraud Prevention page
  • For card not present transactions, utilize the Address Verification Service (AVS) and CVV2 Security prompts. While not guaranteed, these services greatly reduce the potential for a chargeback and/or fraud.

For All Sales Receipts:

  • Obtain customer’s signature
  • Compare signature on receipt to signature on back of customer’s card
  • Keep copies of all sales receipts for at least 24 months
  • Sales receipts should be filed by date order
  • Clearly print return or refund policies for your business on the sales receipts
  • Your customer service number should be printed on every single sales receipt
  • Sales receipts must all be legible; routinely change ink cartridges or use premium receipt paper
  • Sales receipts should reflect your business name exactly as it appears on your signage
  • Immediately ship products and if you offer delayed delivery then indicate it on the sales receipt
  • If offering installment payments or prepayments, make sure the terms are clearly expressed in writing and include the shipping and tax charges, if any.

For further assistance or questions regarding chargebacks,
please call NAMS at (888) 256-6267.

Additional Chargeback information and prevention resources:

http://usa.visa.com/merchants/operations/chargebacks_dispute_resolution/index.html

http://www.mastercard.com/us/merchant/pdf/Avoiding_Chargebacks_Tips.pdf