The GDC Blog

Chargeback scams are inherently frustrating. You did everything right, product copy and images were correct, the order was fulfilled and shipped quickly, and your shipping carrier confirmed delivery. Now a customer is disputing the charge.

Charge Back Process

The chargeback process begins with a consumer contacts their card company to dispute a transaction. If the credit card company finds a potential error, funds are reversed from the merchant’s account and the retailer’s payment processor is notified.

Some transactions are disputed due to honest mistakes. Your customer may not recognize your name on their statement or may have been double billed. Others result from fraudsters looking to scam merchandise or other’s personal information.

To dispute the chargeback, a retailer will file documentation known as a Representment. The representment allows the merchant to present evidence disputing a chargeback. This evidence can include signed delivery receipts, proof the merchant verified address and billing information, and the correct customer CVV code.

Once evidence has been provided to the credit card company, the claim is reviewed. If the merchant can prove the chargeback is incorrect the card holder will be charged again. The card holder has the option to dispute the charge a second time. As a last resort, merchants can enter into arbitration.

Avoiding chargebacks

Strong internal policies can help mitigate the risk of fraudulent chargebacks. Address, identity and payment verification help ensure transactions are legitimate and goods arrive when and where they are expected. Signed delivery receipts document when orders arrived and who received them. Ultimately, reducing chargebacks will boost your bottom line and reduce your headaches.