Best practices to avoid chargebacks and minimize losses

top five chargeback reasons

What is a chargeback?

A chargeback, also referred to as a payment dispute, occurs when a cardholder questions a transaction and asks their card-issuing bank to reverse the transaction.

Best practices to avoid chargebacks and minimize losses:

  1. Do not complete a sale if the authorization request was declined. Ask for another form of payment.
  2. Have clear terms and conditions, including your return policy.
  3. Ship merchandise before processing the sale.
  4. Confirm delivery for all shipments. Require a signature on all deliveries.
  5. When merchandise is returned, process the refund immediately.
  6. Keep the customer informed:
    • Alert when merchandise will be shipped
    • Provide a copy of the refund receipt
    • Send notification before a recurring transaction is processed

When responding to a chargeback, you are required to provide a rebuttal letter containing explicit details of the transaction, compelling evidence including all signed documents.


top five chargeback reasons