Chargebacks are a necessary tool to protect the consumer against fraudulent or unauthorized transactions. However, most of the time it is really harmful for companies, especially when the dispute is not legitimate. Luckily, there are some steps you can take to increase your chances of winning a chargeback dispute.
If you do not know what chargeback means, click HERE to read our post about it.
How to increase your chances of winning a chargeback dispute
Considering that this tool was created to protect the consumer, winning a dispute as a trade can be a really difficult and complex challenge.
For this reason, merchants must take all possible measures to reduce the risk of chargebacks, such as improving customer service, using fraud detection tools, and implementing a secure payment gateway to take complete control over their payment logic.
It is important to keep in mind that disputes will happen, and that as a trade, you will lose some of them; This is completely normal for each business and there are no measures that can reduce them to an absolute zero. However, this does not mean that you should not take any action.
According to Chargebacks911, in 50% of successful Fraud Friend cases, consumers will initiate another illegitimate dispute in the next 90 days. Between this and the negative consequences associated with the high volume of chargebacks, it is important that businesses defend their rights whenever possible and not excessively costly.
These are our tips for you to carry out a successful chargeback dispute:
Maintain accurate records and collect detailed evidence
Generally, disputes tend to be much less favorable for businesses than for consumers. In this situation, it will be in your hands to provide enough solid evidence to prove that the transaction has been legitimate.
For this reason, it is extremely important to keep accurate and detailed records from the beginning. Well-documented transactions are key to winning a dispute: confirmation emails, automated invoices, and follow-up emails with all the details of the delivery are absolutely necessary to prove that the transaction has been legitimate. During the delivery, do not forget to ask for the signature of the receipt; if the trade is not able to show that the product has been delivered to its recipient, it is much less likely to win the dispute
Other evidences in favor of the trade to win a chargeback case include any type of communication (mail, telephone, etc.) between him and the consumer about the transaction, the user’s IP address, the date of download (if the service is digital ), and the evidence that the consumer lives or works at the indicated address.
When a user raises a dispute to claim a transaction with your store, the first thing to do is to find out and study the reason code. This code provides you with valuable information about the reason why the client has decided to submit a chargeback.
It is important to know that each card network (MasterCard, VISA, Discover, AMEX, etc.) has its own code system. Therefore, it is necessary to know the card that the user used to make the transaction.
Many times the reason code does not provide precise details about the true reason for the chargeback. However, the dispute process will be based on this code, so as a trade, it is important that you know it well to prepare your defense.
Solve the problem directly with the client
Having a proactive customer service can be a very powerful tool to resolve and prevent disputes. Normally, the chargeback is initiated by a frustrated user who was not able to recover his money through the shop’s customer service department.
Therefore, providing detailed contact information and making reimbursement policies readily available to the customer can reduce the volume of chargebacks significantly. As a result, customers will be more willing to solve the problem directly with the company instead of claiming the transaction from the issuing bank.
When the user initiates a dispute, the merchant has between 7 and 10 days to accept or reject it through the channels of the issuer. During this period of time, the merchant can contact the customer to get the problem resolved without taking the case to the issuing bank. If an agreement is reached, the consumer may withdraw the chargeback.
If the customer’s problem has been legitimate, it is always better to make a return instead of discussing the chargeback. However, if you believe that the reasons for claiming the transaction are not valid, you can proceed with the process.
Once the dispute has been initiated, you will have very little time to gather your evidence and prepare an adequate response. Pay attention to all deadlines for submission of documentation, study the corresponding reason code, and prepare a response letter to defend your position.
Sometimes, it is very useful to have a template prepared in advance that you will only have to adapt according to the specific case when the time comes.