A chargeback is a process where a customer can dispute any charge with their credit card issuer, cases are judged by credit card companies, often costing online sellers the goods, the payment, and substantial chargeback fees
Unfortunately, chargebacks have become common in the e-commerce sector. To help you avoid the potential damage posed by chargeback, we’ll break down for you what happens when a customer disputes a charge, and how to prevent chargeback fraud.
Why Could E-Commerce Chargebacks Occur?
E-commerce chargebacks can be caused by several legitimate reasons and for many illegitimate ones, merchants receive the dispute and are required to respond in order not to lose by default.
- An unauthorized transaction was charged to a cardholder’s account.
- The goods or services were not as described.
- The goods or services were not received.
- The transaction was processed multiple times.
Are All E-Commerce Chargebacks Worth Disputing?
Not all, but certainly some e-commerce charges are worth disputing – particularly if they appear to be lodged in bad faith.
If you deem a chargeback to be illegitimate, as an online business owner, you’re well within your right to dispute them. Legitimate chargeback requests can be handled easily, but illegitimate ones can be troublesome and should not be neglected. In order to prevent fraudulent or unauthorized chargebacks, follow the steps below:
- Work within the deadline for filing your chargeback dispute.
- Make a record of all your customer transaction details.
- Gather evidence related to the dispute.
- Submit the evidence to the acquirer.
- Use a chargeback rebuttal letter to detail your rebuttal in writing.
- Finally, await the decision.
5 Ways to Prevent Chargeback Occurrences
To help reduce and protect against e-commerce chargebacks, or prevent chargeback fraud, here’s a short list of some tips and tricks to help you out:
- Customer service
Having a team that can resolve the issue efficiently will prevent chargeback recurrences.
2. Shipping options
It is important to offer a secure shipping option that ensures the customer feels confident in their package arriving safely.
3. Customer satisfaction
It is key that you have a positive track record of handling customer disputes. This will ensure that customers will not be likely to file a chargeback.
4. Fraud detection
Have a robust fraud detection system in place, such as FUGU, to prevent chargebacks due to fraudulent transactions.
5. Order and transaction tracking
All orders and transactions should be monitored on a continual basis. That way, if a dispute arises, the transaction or order history is easily accessible and, if needed, a dispute can be lodged.
Contact FUGU Today
Remember, the most common chargebacks are related to customer dissatisfaction, and solving this will go a long way in preventing chargebacks. If you’re looking for a solution to fight chargebacks and ensure that they aren’t a result of your company’s error, contact the Fugu team today to schedule a demo and learn about how our chargeback prevention method can help you.
