When a customer has an issue with a charge on their credit card, they can contact their bank and dispute the charge. The bank will then make a chargeback.
A customer might dispute a charge for one of the following reasons:
- Fraudulent
- Unrecognised
- Duplicate
- Product not received
- Product unacceptable
- Credit not processed
Fraudulent
This is the most common reason for a dispute when the cardholder does not recognise the payment that appears on their billing statement from their card issuer. Most often this is due to the card being stolen or lost and is used to make transactions.
The best way to deal with a fraudulent chargeback is to try and contact the customer. It can be as simple as the customer forgetting about the purchase, or it may have been made by a spouse, friend, or family member without the card holder knowing.
If the customer agrees that the charge is in no further dispute, then you should tell them to contact their bank and say that they want to withdraw the chargeback. This will not be enough alone as the customer will need to provide sufficient evidence to their bank. This will also need to include their billing statement which has this transaction.
- Evidence proving a link between the person receiving the services and the cardholder (i.e. photographs or emails)
- Evidence the customer signed for any services. For example, if any products are picked up, you can provide a cardholder signature or any copies of identification.
If you think that the cardholder is mistaken or not telling the truth, then you should submit the following evidence to the customer's bank:
- the date and time that the order was fulfilled
- the billing information that the customer used
- the IP address and country used for the order
- shipping and tracking information for the order
Press Here for link to: HOW TO FIND ORDERS IN OU CONSOLE
If you believe the charge is legitimate and was using a stolen credit card, unfortunately you will need to accept the dispute.
The credit card networks assign liability for accepting fraudulent online transactions to you, the business.
Other Chargeback Types
Unrecognised
If a cardholder reviews their billing statement and doesn't recognise a transaction, they will contact their bank to dispute it. Regardless of whether a customer thinks the transaction is fraudulent, the chargeback will be marked as Unrecognised.
This is where is it important to ensure your billing descriptors are easily recognisable.
To deal with an unrecognised charge is similar to a fraudulent, always try and contact the customer first. The customer could have forgotten about the purchase, or the purchase might have been made by a spouse, friend, or family member without the card holder knowing.
If the customer agrees that the charge should be reversed, then you should tell them to contact their bank and say that they want to withdraw the chargeback.
You should still submit evidence to the customer's bank, including the statement where the customer said they would drop the charge. You could include evidence such as:
- the date and time that you fulfilled the order
- the billing information that the customer used
- the IP address and country used for the order
- shipping and tracking information for the order.
Duplicate
If a customer claims they have been charged numerous times for the same product, the chargeback will be marked as Duplicate.
If you didn't charge your customer twice, then you should try to get in touch with them. You can show them that the two charges were for separate products or services. If the customer agrees that the charge was justified, then you should tell them to contact their bank and say that they want to drop the chargeback.
If the customer does not withdraw the chargeback after you speak to them, then you'll need to submit evidence that the two charges were for separate products or services. This evidence could include:
- an explanation of the reason for the two charges
- receipts that shows that the two charges were for different products or services
- any communication with the customer where you let them know about the two charges.
If you did charge your customer twice for the same product or service, (e.g. you made 2 orders & they took 2 orders) then you'll have to accept the chargeback.
Product not received
A dispute marked as Product not received means that the customer has claimed that they did not receive their order.
Speak to your customer first and get an understanding of why the product was filed as this. Getting this information will help to prevent this in the future.
If you can't resolve the issue with your customer, you should submit evidence to the customer's bank that proves that the customer received the product or service before the chargeback was made. This evidence could include:
- the date and time that you fulfilled the order
- the billing information that the customer used
- shipping and tracking information for the order
- Check order long in the OU console
Product unacceptable
The chargeback will be marked as Product unacceptable if the customer feels that the product was received but was not as described.
This can be avoided by making sure that all your products online are exactly as sold (as per images and descriptions). You can always add a clause in your description that there may be a variation to what is received.
Speak to you customer first, to understand why they are not happy and how this could be prevented in the future with other customers.
If you can resolve this with the customer and they agree to withdraw the dispute, have them contact their bank.
You should also send evidence to the customer's bank that the customer agreed to withdraw the chargeback. If the customer didn't try to return the product before the chargeback was made, or if you provided the customer with a replacement product, send evidence of that as well.
Whether you resolve the issue with the customer or not, you should still send any relevant evidence to the customer's bank. This evidence could include:
- the date and time that you fulfilled the order
- the billing information that the customer used
- shipping and tracking information for the order
- descriptions or pictures of the products from your store that prove that they were as described.
General
A chargeback is marked as General if it doesn't fit into any of the other categories above.
Speak to your customer first. Find out what the problem is first and once discussed, then you should tell the customer to contact their bank and say that they want to withdraw the chargeback. You should also send evidence to the customer's bank that the customer agreed to drop the charge.
If the customer doesn't want to withdraw the chargeback, then you should send evidence to the customer's bank that the charge was valid. This evidence could include:
- details about the products that were ordered
- the date and time that the order was fulfilled
- the customer's billing information
- the customer's IP address and country
- emails or other communication you had with the customer
- proof of prior refunds or replacement shipments
Press here for link to: Stripe's Service Level Agreement
Press here to Read our article here for Best Practices for Avoiding Chargebacks.