How to Handle Chargebacks

Posted: June 25, 2018 | Updated: June 25, 2018

Though merchants always try to avoid chargebacks the fact of the matter is that sometimes they happen. Though retailers hate it when the bank sends back a customer’s payment, every one of them has to be prepared to deal with this occurrence.

Credit card processing is often a problem for merchant services as not every customer can afford every purchase they make. There are many steps involved in the process and they can have negative consequences for merchants. The process starts with a customer filing a complaint. When they do, their bank investigates their claim. If they side with the customer while investigating, they credit the purchase back to their payment method, hurting the merchant that was on the receiving end of the purchase. A pending request for a chargeback can be reversed at any time during the process. Merchants are required to come forward with the proof and the documents that show whether a charge was legitimate or not. Failure to submit the proper documents means that the process is completed in favor of the customer.

When it comes to merchant services, there are ramifications both in the long term and in the short term. One such ramification is that the merchant has to pay a fee of between $20 and $100 for every claim filed by a customer. In the event the claim is then canceled by the customer, the merchant still has to pay the fee.

There is a predetermined amount that merchants are able to pay back when a customer files a claim. When rates end up being higher than that amount, merchants pay steep fines and may even have their account terminated by the bank they work with.

Merchants must do everything in their power to avoid encountering this problem. They can do this by ensuring that they sell the best possible products or services they can. It is also essential to pay close attention to the details of each transaction so that payment processing doesn’t become a problem.

However, the most important task for merchants is to ensure that all credit card processing is safe from fraud. Being able to detect fraud at the first sign of it is often the best way to deal with this.

Finally, merchants must always take full responsibility for handling each chargeback case quickly and efficiently. Disputing claims the merchant believes to be false is the best defense. The more merchants fight to prevent these issues the more consumers will learn about the subject and the less likely it is to happen again. Educating consumers on the rights and wrongs helps them avoid making the wrong move. This is how merchants can best deal with claims made by customers.

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Categories: Chargebacks, Merchant Services

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