A chargeback is a dispute between a customer and the business. In this video we explore what a chargeback is, and some of the reasons that chargebacks occur.
If you get too many chargebacks your merchant account can be shut down. In this video we explore what you should do to keep your account in good standing if you've been targeted by fraudsters and suddenly start receiving a lot of chargebacks.
Card testing is an increasing problem for #ecommerce merchants. Fraudsters are constantly looking for ways to test cards. It's even a problem for payment processors, Visa and Mastercard. In this video David explains what card testing is, why fraudsters do it, and how to stop it, in addition to advice on how to get some of the fees reversed when it occurs.
Hello, David here at Merchant-Accounts.ca. Today I'm going to tackle a very frustrating topic. Sometimes it's infuriating. What do you do when you get a chargeback and you lose it and it's completely unfair? What's left? Stay tuned, I'm going to do my best to help in one second.
In the past the best way to manually screen suspicious orders was to call the customer on the phone and ask them questions. Now, with modern web based video technologies it's possible to validate customers in a way that was never previously possible.
Visa is addressing some of the most common chargeback related complaints from merchants. Going forward, chargebacks are a thing of the past and will now be known as disputes.
A positive AVS result is an indicator of a legitimate transaction. In this short explainer video David explains what AVS is, how it works, and things to be aware of when relying on an AVS security result for any particular order.
David explains what two factor authentication is, how it works, and how it shifts chargeback risk for fraud onto the card issuer and away from the merchant.
How does Visa and MasterCard chargeback arbitration work? When a merchant has fought a chargeback and lost there is still one more chance to turn it around by taking it to the card brands for arbitration.
There is a strong argument that 3DSecure (version 2) is the single best anti-fraud tool available to any online merchant. In this video David explains what 3DSecure is, how it works, how you set it up on your website, and different ways that it can be configured.
Pre-authorizations are one of the best tools available to prevent fraud. A pre-auth will enable you to return security results for the order, such as AVS and CVV security checks. More importantly, it gives you a chance to evaluate the order and determine if you want to accept the sale. You are fully protected because you can't get a chargeback until you capture the funds from the pre-authorization.
Merchants have to keep chargeback percentages under the allowable Visa and Mastercard chargeback thresholds. (For more info on chargeback thresholds see: https://www.merchant-accounts.ca/visa-and-mastercard-chargeback-thresholds-2023.php). The problem is that some types of businesses simply get more chargebacks than others. David explains a strategy that some businesses can employ to lower their chargeback ratios, and prevent you from ending up on a Visa or Mastercard chargeback mitigation program.
The first in our fighting chargebacks series concentrates on fighting fraud reason code chargebacks. For e-commerce and card-not-present merchants fraud chargebacks are usually the hardest ones to win. The challenge is that you have to prove the cardholder is who they say they are, and that they actually ordered the item or service in question. It's a very uphill battle if you try to combat fraud it after the dispute has already been received. With this reason code, you really do need to take a preventative approach. The purpose of this series is to give business owners an idea on the best way to respond to certain types of chargebacks, but for fraud in particular - the battle is mostly won prior to you even shipping the order. Ultimately, if the cardholder didn't actually buy the item or service in question you can't win, so in this discussion David also talks about ways to validate orders.
How to fight Item not Received (Services not Rendered) chargebacks
(Slightly edited from video transcript for greater readability)
Key Takeaways
1
Understand the "Item/Service Not Received" Chargeback Reason
An Item / Service not received chargeback means the customer is saying that they didn't receive the thing they paid for. In order to win this you're going to have to prove that the customer did indeed receive what they paid for.
2
Proving your Customer Received the Items
Different types of businesses will require different types or proof to show that the customer received what they were promised. This might include delivery photos, the terms and conditions on your invoice or e-commerce website, or for electronic software services server logs. You need to consider your product or service and think of ways that you could improve your process to be able to show when a customer has received what they were promised.
Need help with this topic? Or a rate quote?
Whether its questions about this article, or you want to see how we can lower your costs. Don't hesitate to contact us.
Hello, David here Merchant-Accounts.ca with another episode in our How to Fight Chargeback Series. This one is for how you fight chargebacks with the "item or service not as described" reason code. Stay tuned because we'll dig in in one second.
Item not received or services not rendered chargebacks
Of all the chargeback reason codes, this is perhaps one of the most subjective ones and arguably the easiest one to fight. Maybe kind of unclear, but you do have a chance. The nature of this chargeback reason code that is the item or service is not as described, is that the customer admits they ordered something, they admit they received it, but they aren't happy with it. For whatever reason, they're saying that they bought a Rolex, but they received an RX. They're saying that they rented a villa, but they showed up and it was a shanty. They paid for expertise, but they received something much less. They simply didn't receive what they expected, and importantly, they didn't receive what was promised to them, which is the nature of the dispute.
What was promised to them? When you fight chargebacks, I can give general advice. It's impossible for me to do a YouTube video and make it perfect for every business because every business is unique. here's the starting point of the question for this specific chargeback reason code. What I mean is exactly what did you promise to your customer? Both in your web copy and in your terms and conditions. Let me give you an example. If you have a website selling something, but you bury it in your terms and conditions that the item received may not be representative of what they saw on the website, well in that case, you're going to lose that chargeback. You usually can't win those, and you shouldn't win those on a technicality you're supposed to provide. Visa wants you to be an honest and ethical merchant, and that is the reason for this cardholder protection. I fully support it. You should not rely on your terms and conditions in a shady way to try and squeeze out of it. That's not a proper way to do it, and I don't have any advice for you.
However, a lot of the time merchants bend over backward. They offer a great product or service, but the customer's just being difficult or unreasonable. That does happen, and that's what this video is about. You can win these chargebacks, especially if it's properly documented. What should you do to win this chargeback? You need to laser focus on what was promised to the customer. You should probably do a screenshot of your website where your marketing copy showed what they were purchasing, if it was an online sale a copy of the invoice, or any correspondence if it was not an e-commerce purchase.
Gather evidence
What can be especially helpful is that correspondence. Let's say that you're a designer and we all know design can be subjective. However, maybe they're, you're designing a logo for them, and along the way you're emailing with the customer, you're communicating with them, and they're commenting on the progress. They've signed off on the font, they've signed off on the color. You would include that correspondence to show, hey, like we worked with this person, and here's the signing off on our work. Now, this doesn't need to be a long video because it's too situationally specific for each type of business, but if you consider what you promised to the customer and you look at what proof you have to see that it was rendered and that they received it. Now that could be photos of the item that went out the door or documentation to prove an item was legitimate proof of delivery, especially if you have the delivery slip that states that the customer was allowed to examine the item and before accepting it, they signed that it was received in satisfactory condition and was as described.
Now, a lot of my viewers will be sitting here watching and being like, yeah, Dave, I would love to wish that document into existence. You can't always do that, and just like my other videos in this series, you can't plan retroactively, but you can also think ahead. Like a lot of chargebacks, it can be really hard to win if you don't have compelling evidence. Let me rephrase that, like a lot of chargebacks, it can be impossible to win if you don't have compelling evidence. If you're watching and saying, I wish I had what Dave's talking about. Sometimes these are lessons that we take away to fight and win the next one. Now, I don't want to upset any viewers, but I also want to be honest with the situation. A lot of fighting chargebacks is about planning ahead and constantly improving.
It's also how you provide your evidence, in the chargeback response. When you do fight the chargeback laser focus in on proving you delivered as promised, but keep it concise and short. I made a mistake one time. I had a client, who had pages, pages upon pages of documentation photos. The customer was there in person, but they still lost. The reason they lost is it was too long. Now, they shouldn't have, it was wrong that they lost. It was the card issuer who dropped the ball, but guess what? The card issuer dropped the ball. They have humans there. They're working, they're not emotionally invested. They don't want to read an encyclopedia. You have to, I always say write it like it's a kindergarten child on the other side.
Let's go, with the designer example. They hired us to design a logo. Here's the logo on January 10th, they hired us in February. We signed off on the font in March, and we signed off on the final design. That's it. That's all that you need.
Summary
In summary, include the copy on your website or any correspondence that explains what they were purchasing. Include a top copy of your terms and conditions that govern the sale, and then include any correspondence, anything along the way that can prove that you delivered what was promised to this customer. Now, if you're having a problem with chargebacks that you need help with, please do reach out to us Merchant-Accounts.ca. We're happy to listen and give the best advice that we can to try to help you win the chargeback. Also, if you would like a quote for credit card processing for your business, again reach out to us at Merchant-Accounts.ca just for the record, we often work with our clients after they get a chargeback to see what they could change going forward to have a better chance of winning. You always keep learning and growing, and that has to be the approach to minimizing your chargebacks and then improving your win rate when they happen. With that, thanks for watching. Have a nice day. Bye now.
A chargeback is a dispute between a customer and the business. In this video we explore what a chargeback is, and some of the reasons that chargebacks occur.
If you get too many chargebacks your merchant account can be shut down. In this video we explore what you should do to keep your account in good standing if you've been targeted by fraudsters and suddenly start receiving a lot of chargebacks.
Card testing is an increasing problem for #ecommerce merchants. Fraudsters are constantly looking for ways to test cards. It's even a problem for payment processors, Visa and Mastercard. In this video David explains what card testing is, why fraudsters do it, and how to stop it, in addition to advice on how to get some of the fees reversed when it occurs.
Hello, David here at Merchant-Accounts.ca. Today I'm going to tackle a very frustrating topic. Sometimes it's infuriating. What do you do when you get a chargeback and you lose it and it's completely unfair? What's left? Stay tuned, I'm going to do my best to help in one second.
In the past the best way to manually screen suspicious orders was to call the customer on the phone and ask them questions. Now, with modern web based video technologies it's possible to validate customers in a way that was never previously possible.
Visa is addressing some of the most common chargeback related complaints from merchants. Going forward, chargebacks are a thing of the past and will now be known as disputes.
A positive AVS result is an indicator of a legitimate transaction. In this short explainer video David explains what AVS is, how it works, and things to be aware of when relying on an AVS security result for any particular order.
David explains what two factor authentication is, how it works, and how it shifts chargeback risk for fraud onto the card issuer and away from the merchant.
How does Visa and MasterCard chargeback arbitration work? When a merchant has fought a chargeback and lost there is still one more chance to turn it around by taking it to the card brands for arbitration.
There is a strong argument that 3DSecure (version 2) is the single best anti-fraud tool available to any online merchant. In this video David explains what 3DSecure is, how it works, how you set it up on your website, and different ways that it can be configured.
Pre-authorizations are one of the best tools available to prevent fraud. A pre-auth will enable you to return security results for the order, such as AVS and CVV security checks. More importantly, it gives you a chance to evaluate the order and determine if you want to accept the sale. You are fully protected because you can't get a chargeback until you capture the funds from the pre-authorization.
Merchants have to keep chargeback percentages under the allowable Visa and Mastercard chargeback thresholds. (For more info on chargeback thresholds see: https://www.merchant-accounts.ca/visa-and-mastercard-chargeback-thresholds-2023.php). The problem is that some types of businesses simply get more chargebacks than others. David explains a strategy that some businesses can employ to lower their chargeback ratios, and prevent you from ending up on a Visa or Mastercard chargeback mitigation program.
The first in our fighting chargebacks series concentrates on fighting fraud reason code chargebacks. For e-commerce and card-not-present merchants fraud chargebacks are usually the hardest ones to win. The challenge is that you have to prove the cardholder is who they say they are, and that they actually ordered the item or service in question. It's a very uphill battle if you try to combat fraud it after the dispute has already been received. With this reason code, you really do need to take a preventative approach. The purpose of this series is to give business owners an idea on the best way to respond to certain types of chargebacks, but for fraud in particular - the battle is mostly won prior to you even shipping the order. Ultimately, if the cardholder didn't actually buy the item or service in question you can't win, so in this discussion David also talks about ways to validate orders.
Need professional guidance? Contact us for a free one hour consultation.
Can I Help Lower Your Processing Fees?
If you found this content helpful, will you give me the opportunity to quote on your business?
My name is David Goodale, CEO at Merchant Accounts.ca. I launched our business in 2001 and have over 20 years of expertise in the field of online payments. If you have a payments related question or project, and especially if it relates to multi-currency or international e-commerce don't hesitate to contact me. I'm always happy to help with an honest opinion, and enjoy chatting with folks from interesting businesses.
