Chargeback Management Guide

What is a Chargeback?

• It is the reversal of funds from a merchant to a customer, typically initiated by the cardholder's bank in response to a dispute filed by the cardholder.

Chargebacks can occur for various reasons:

1. Order was not received
2. Damaged or defective merchandise
3. Product is not as described
4. Incorrect billing
5. Unauthorized charges

Chargeback Dispute Process:

1. Store (merchant) receives chargeback notice.
2. Chargeback notice is reviewed: The notice will detail the reasons for the chargeback, the amount being disputed, and instructions on how the merchant can contest the chargeback if they believe it is unjustified.
3. Merchant decides if the chargeback dispute should be contested or not.
4. Merchant must reply to the chargeback notice promptly and present valid evidence to contest.
   
   Forms of Evidence:
   1. Proof of delivery
   2. Transaction records
   3. Communication records
   4. Signed documents
   5. Photographic evidence
   6. Terms of use & policies
      
      

How to Prevent Chargebacks

Best Practices: By following these guidelines and utilizing advanced security features, merchants can minimize the impact of chargebacks on their business operations.

1. Verify credit card at pickup or delivery: Ensure the last four digits on the card match the Order Queue receipt.
   
   
2. Verify ID: Ensure it is valid and that the name matches the credit card.
   
   
3. Confirm order: Before completing the transaction, repeat the order back to the customer + inspect product(s).
   
   
4. Get customer to sign receipt: The signature should match what's shown on the ID or credit card. Keep your receipts organized.
   
   
5. Practice due diligence: Staff should be aware of store policies and be able to communicate this to customers. Be extra vigilant with new customers.
   
   TIP: In the Order Queue, new customers are tagged with a green icon next to their name (on a green background).

   
   

Advanced Security Features

• Store owners: Implement additional security features* with your payment processor to enhance protection against chargebacks.
  • AVS Check: Helps verify the address of a person claiming to own a credit card
  • 3D Secure: Adds a layer of authentication at checkout, making unauthorized transactions less likely
  • Hosted Checkout: Provides a secure payment environment managed by your payment processor 

- Buddi is integrated with Merrco and Moneris for 3D Secure.
- We also have Hosted Payments available for Merrco users.

*While not foolproof, these features significantly reduce the risk of fraudulent disputes.