A Guide of Understanding of Chargebacks
Merchandise Defective
Why This Occurs?
The cardholder claim(s) states that the goods or services were not the same as shown and described online for Internet transactions, or as described on the sales receipt or other documentation presented to the cardholder at the time of the transaction, or not the same as the merchant’s verbal description for a telephone transaction, or shipped to the cardholder and received, but were damaged or defective.
pixel77-free-vector-question-mark-concept1234These claims are not valid because the merchandise received by the cardholder was not defective. Information about the product was described to the cardholder before the purchase. If the cardholder claimed they had returned the merchandise, but the merchant has not received any notice or a returned shipment, the cardholder did not cancel or return the product according to the terms and conditions.
The Merchant can provide accurate descriptions of merchandise or services. Descriptions of merchandise or services shown in catalogs, on the web and sales receipts, or used in telephone order-taking scripts must be accurate, complete, and not unintentionally misleading.
Retrieval Request
Why This Occurs?
There are various reasons for retrieval requests. It may be a result of a customer question or dispute, inaccurate or incomplete transaction information, a processing error or an indication of potential fraud. The bank will request a legible copy of the transaction authorization as proof.
pixel77-free-vector-question-mark-concept1234The Merchant can provide a sales receipt with imprint or swipe and signature. All digits of the card number and cardholder name of a manual imprint must be legible. On a swiped card, the account number, authorization code, date, and amount must be readable. In the case of a Card Not Present transaction, cardholder name and address must be printed on the receipt. Reversal rights are limited.
The merchant usually has 5-7 days to handle this situation (but the time frame depends on the bank). If the merchant does not respond, the retrieval request will turn into a chargeback for the reason “requested an item not received.” It is worth mentioning that such a chargeback has no reversal rights if there was no prior reaction of the merchant to the retrieval request.
Goods Not Provided
Why This Occurs?
The cardholder claim(s) states that merchandise ordered was not received or that the order was canceled as a result of the merchandise not arriving by the expected delivery date. The most common causes of this chargeback reason code are merchandise not shipped, the transaction was billed prior to shipping merchandise, and merchandise was not sent by agreed upon delivery date.
pixel77-free-vector-question-mark-concept1234These claims are not valid if the merchandise was delivered by the agreed-upon delivery date and details of delivery, such as a delivery receipt signed by the cardholder or delivery confirmation that the merchandise was delivered to the correct address, can be provided. The cardholder’s signature on a delivery receipt and confirmation of delivery to the billing address of the card will give a better chance
of reversal.
All orders should pass full AVS and CVV2 checks prior to shipping product. Orders returning a partial AVS match on the billing address associated with the credit card should be put through additional checks for fraud prior to authorization and shipping of the product.
Recurring Transaction
Why This Occurs?
The cardholder claim(s) to their bank for Recurring Transaction, acknowledges participation in at least one transaction at the merchant outlet but disputes participation in other remaining transactions. The most common causes are a failure to void multiple transactions and attempts to process transactions fraudulently.
pixel77-free-vector-question-mark-concept1234These types of claim are not valid because the cardholder did participate in more than one valid transaction. This can be proven to acquirer(s) with appropriate documentation, such as sales receipts, invoices, etc. The cardholder agreed to the terms and conditions which say that charges for a product/service
Fraud
Why This Occurs?
The cardholder received a transaction for which authorization had been declined. The most common causes are attempts to circumvent or override a declined authorization by forced posting, multiple authorization attempts, or an alternative authorization method.
Services Not Rendered
Why This Occurs?
The cardholder claim(s) states that services ordered were not received or that the order was canceled as a result of services not arriving by the expected delivery date. The most common causes of this chargeback reason code are services not provided, and transaction billed prior to service.
pixel77-free-vector-question-mark-concept1234These claims are not valid because the cardholder was provided all sums of the service in question in expected and/or proper condition. The cardholder verified and approved the sales transaction receipt with the authorization code, transaction date, and transaction amount.
The cardholder did not cancel the services according to the terms and conditions and is being benefited to the day the dispute was filed and services had to hold.
Clear lines of communication between the merchant and the cardholder are a vital component of successful credit card processing. When cardholders do not recognize a charge or have difficulty reaching the merchant with questions, it opens the door to cardholder disputes and chargebacks. Written communications with the cardholder via email or print can be a powerful aid to keeping the lines of communication open and can provide the merchant with additional protection in the event of a chargeback or dispute.
Refund Not Posted
Why This Occurs?
This type of claim(s) is not valid because the cardholder is not eligible for a refund according to the terms and conditions.
