How Does a Chargeback Get Reported?

Chargebacks are the little nasties of business that owners love to hate. The reason for such disdain is that a fair percentage of them are not legitimate. Businesses conduct credit card processing to increase the possibility of more sales. However, with an increase in...  

 

Chargebacks are the little nasties of business that owners love to hate. The reason for such disdain is that a fair percentage of them are not legitimate. Businesses conduct credit card processing to increase the possibility of more sales. However, with an increase in sales comes an increase in chargebacks. Legitimate customers place chargebacks on their credit cards when they do not receive items that are in good condition. Some of them may also perform a chargeback when an identity thief victimizes them. However, some customers use chargebacks as a means to get products from the merchant without having to make payment.

How Does a Chargeback get Reported?

The chargeback process with credit card processing starts with a customer complaint. The consumer calls the credit card company, tells the customer service representative the problem, and prompts the beginning of an investigation. The credit card company then launches an investigation to gauge the validity of the claim. If the credit card company sides with the customer, it will make a motion to withdraw the funds from the merchant accounts. A business that has a well-established card processing system and a merchant account can be notified of such chargebacks.

Certain merchant accounts have attached features that will allow the account holder access to online management that includes information about chargebacks. Additionally, the person can request that the merchant account provider send a fax in chargeback situations. When trying to run a business, keeping track of occurrences such as chargebacks are important for smooth operations.

Using Chargeback Information to Prevent Chargebacks

To save money in the future, a merchant can deny services to anyone who has placed an illegitimate chargeback. The owner of the business has the right to review chargeback reports and ban customers who try to abuse the system repeatedly.

Another way a company can avoid chargebacks is by using a strict verification system physically and online. If a person walks into the store and wants to use a credit card, the cashier or clerk should verify that person’s identity immediately and make sure the name on the card matches the name on the identification. The individual should also check the expiration dates and security codes.

The right credit card processing software can verify online purchases thoroughly. Such programs can electronically check a person’s credit card and search for the available funds and a name match to legitimize the purchases. This protects merchants from taking repetitive chargeback hits.

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