6 Tips for Fighting Credit Card Chargebacks

A credit card chargeback is a refund issued when a cardholder contacts their card issuer to request a reversal of charges that they feel are made in bad faith. The issuer investigates the request and, if it determines that the charge was not authorized, fraudulent, or the merchant didn’t deliver a quality product or service, it reverses the charge and refunds the amount to the cardholder.

This is a common practice that—for legitimate or illegitimate reasons—can have a significant effect on your online store’s bottom line.

To help you mitigate and manage these impacts, here we discuss strategies on how to deal with chargebacks and how to fight a credit card dispute.

How Do You Fight a Credit Card Chargeback?

One of the biggest disagreements many online merchants have with return item chargebacks is that they are often authorized far too liberally. Many merchants would argue that they weren’t given any warning of a customer complaint or granted an appropriate amount of time to solve the customer’s issue with a product or service.

Thankfully, there are steps you can take to fight credit card chargebacks:

1. Be Aware That Chargebacks Are Often Issued Without Warning

Usually, you will receive no notification of a chargeback. Most times, the only way you’ll know of a chargeback is because funds will be withdrawn from your business’ bank account by a customer’s card issuer.

2. Keep a Vigilant Watch on Your Business’s Bank Account

Once you become aware of a chargeback, understand that there is a response deadline that you must meet in order to dispute the removal of funds. As such, it’s a good idea to monitor your business’ bank account; otherwise, you’ll likely miss the window of time you have to contest a chargeback.

3. Do Your Research on Why a Chargeback Was Issued

In order to lodge a dispute, understand there is a “reason code” issued with each chargeback that explains the reason the chargeback was issued. To help you fight a chargeback, be sure to do your research on the reason code, as it will go a long way in helping you win a chargeback dispute.

4. Gather Compelling Evidence to Fight the Chargeback

In order to successfully dispute a chargeback, you must gather enough compelling evidence for a card issuer to reverse their decision. Evidence like sales receipts, a copy of your returns policy, and any direct communication with the customer will all help to overturn an illegitimately issued chargeback.

5. Write a Rebuttal

A well-written rebuttal letter will go a long way to successfully disputing a chargeback. Include the evidence you have gathered and describe why you believe the chargeback has been granted unjustifiably or in bad faith.

6. If You Need It, Reach Out for Help

Successfully handling chargebacks can be both a confusing process and a lot of hard work. To soften the blow, why not reach out to an institute that fights chargebacks regularly, like FUGU?

Should You Fight Chargebacks?

Chargebacks are expensive, and the cost isn’t just in the fees. You also lose the revenue generated from a sale, which can take a considerable chunk out of your profits. To avoid this, chargeback management measures can be taken, although even the best preparation won’t keep your business completely safe from chargebacks.

To help you out, contact our team of experts here at FUGU, as we are more than happy to help you prevent as many chargebacks as you can so that you can get back to driving your business toward success.