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:
- Order was not received
- Damaged or defective merchandise
- Product is not as described
- Incorrect billing
- Unauthorized charges
Chargeback Dispute Process:
- Store (merchant) receives chargeback notice.
- 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.
- Merchant decides if the chargeback dispute should be contested or not.
- Merchant must reply to the chargeback notice promptly and present valid evidence to contest.
Forms of Evidence:- Proof of delivery
- Transaction records
- Communication records
- Signed documents
- Photographic evidence
- 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.
- Verify credit card at pickup or delivery: Ensure the last four digits on the card match the Order Queue receipt.
- Verify ID: Ensure it is valid and that the name matches the credit card.
- Confirm order: Before completing the transaction, repeat the order back to the customer + inspect product(s).
- Get customer to sign receipt: The signature should match what's shown on the ID or credit card. Keep your receipts organized.
- 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.
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