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:
- Do not complete a sale if the authorization request was declined. Ask for another form of payment.
- Have clear terms and conditions, including your return policy.
- Ship merchandise before processing the sale.
- Confirm delivery for all shipments. Require a signature on all deliveries.
- When merchandise is returned, process the refund immediately.
- 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.
