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Protecting your business from chargebacks

The impacts of chargebacks on a business, whether successfully or unsuccessfully disputed, can cause stress and create a strain on resources as well as having a telling financial impact. By being informed on what they are and how they may potentially occur can protect you from occurring.

Preventing card fraud

Spotting fraudulent card transactions when the card is either present and not present is the first step in reducing the possibility of a chargeback dispute impacting your business

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However, chargebacks can also happen when…


either deliberately (merchant fraud) or accidentally (merchant error) liable in a chargeback dispute depending on the circumstances.


initiate friendly fraud – made by the cardholder or someone with legitimate access to the cardholder’s account.

Find out how merchant error and friendly fraud can lead to chargeback disputes and learn five practical ways to prevent it.

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When chargebacks happen

Who’s involved

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Disputing a chargeback

The cardholder initiates a chargeback claim by contacting the issuer, who must verify the chargeback claim and forwards the claim to the card scheme.  The card scheme then sends the claim to the acquirer, who considers the evidence from the claim and forwards the claim to the merchant.

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What steps can you take when you are involved in a chargeback dispute?

Be prepared and record transactions

Depending on your business type and structure, and the nature of the purchase being disputed, all or some of the below examples will equip you with relevant evidence to defend a chargeback claim from a cardholder.

  • Proof of customer purchase and history of customer transactions
  • Confirmation of delivery confirmation or any evidence the customer received the product or service)
  • Copy of the refund or return policy agreed to by the customer
  • AVS (address verification system) and CVV (card verification value) matches
  • IP address of customer’s purchase device for online transactions, along with exact time and date of purchase
  • Geographic location of the device
  • Any correspondence, with the cardholder or their representatives – emails, phone records or letters/ records documenting conversations with the customer.

Follow the timeframes and deadlines

Being aware of the timeframes and deadlines and following them is key to implementation a success appeal to a chargeback case.

Once the cardholder has made a chargeback request, it’s important to note the timelines set out by the acquirer for responding to the initial notification and submitting supporting documents to defend the chargeback claim.

Engage with the acquirer and submit evidence and all other requested documentation to them on time.

Engaging fully with the acquirer improves your chances of successfully defending your business against an illegitimate claim. This will help the acquirer create a more-informed picture of the situation.

Responding to the decision

By keeping and submitting relevant records and engaging fully with the process, an illegitimate chargeback claim should hopefully be appealed successfully. If you are unsuccessful, you can still appeal to arbitration but, as mentioned, this can cost up to $500 and may take some time for a final decision to be made.