Chargebacks & Ecommerce Merchants’ RightsAugust 29, 2018
Typically, credit card chargebacks are so few and far between that most ecommerce merchants feel they aren’t worth the hassle of disputing. Unfortunately, when that mindset persists, it exposes the business to continuous losses via chargeback fraud (i.e. when consumers initiate unwarranted credit card chargebacks for items they knowingly purchased in an attempt to avoid paying for them.)
While it’s true that the work involved is time consuming, disputing chargebacks with consistency is important limiting financial losses over time. Establishing step-by-step guidelines can greatly reduce the burden of disputing chargebacks. But, creating these procedures requires some due diligence on your end. To start, you should understand what merchants’ rights are extended to you by each of the credit issuers you work with. Visa, Mastercard, et. al., have rules in place that, when adhered to, grant rights and protections to merchants in chargeback disputes.
The rules and regulations from credit card issuers often place a burden of proof on either the merchant, the customer, or both. For example, let’s say Visa has a rule in place that a customer cannot file a chargeback unless they have attempted to return the item. The customer would need to provide proof of return. Merchants should make sure that each transaction is thoroughly documented (ID verification during checkout, delivery confirmation, etc.) so they can easily provide supporting evidence when filing a dispute.
Essentially, by thoroughly understanding your merchants’ rights and meticulously recording all the relevant transaction information, you’ll have the foundation necessary to streamline chargeback disputes so they take up less of your time – and money – over the long run.