What to Do When You Receive a Chargeback?

When you are running a business, there are going to be some issues and returns with your customers. This should be factored into your revenue forecasting. For most businesses, it’s around .10 to .30 percent of your businesses sales that will cause chargebacks. Therewill be somegenuine chargebacks, but there will also be fraudulent ones. So, what can you do when you receive a chargeback?

Response to the Chargeback

You can fight chargebacks, but you first need to respond to the chargeback. There are businesses that choose not to respond due to many reasons. One of them is that they are covered by chargeback protection and fraud management, so they lose no money, or they know the chargeback is real.

If you choose not to respond, the money is returned to the customer. The problem with this is that you lose the profits, the item, and have to pay a fee. This is why most businesses choose to fight chargebacks.

If you choose to fight chargebacks, you have to provide compelling evidence of the transaction and the customer. There is a wide range of evidence that can be used, including fraud scores and receipts.

After you have all of your evidence, you will have to create a response letter. A chargeback expert can help you create this letter. After the letter is completed, the letter is sent to the customer’s bank, and the money is handled.

Wait!

After the letter is sent to the customer’s bank, you have to wait. They will ask you for all the evidence that you have, and your merchant account processor will also be asked for evidence of the transaction. This can take a few days since there are delays with some of the processers.

The Bank Decide Who Gets the Money

Chargebacks were originally meant to protect consumers, so their bank decides the outcome. This is why you have to provide as much evidence that you canbecause their bank is going to be biased towards their clients. If you provide the right evidence, you will win the chargeback claim. This means that the Chargeback Representment is accepted which you have provided to fight against chargeback. At this point, the money is returned to your account.

If you lose the chargeback, the issuing bank put the temporary funds as permanent to the customer. You will also be forced to pay a chargeback fee.

The time that a chargeback process takes can vary from less than a month to over six months. This depends on the card network and the issuing bank. The amount of time to process the chargeback also depends on the amount of time that you take to gather evidence. Most consumers avoid chargeback since waiting up to six months to get their money back is not appealing to them.