What You Know Could Save You Money
A chargeback is a reversal of a sale or credit transaction initiated by the issuing bank either due to a technicality or on behalf of the cardholder. All chargebacks are violations of the rules and regulations established by a payment brand, such as Visa® or MasterCard®.
Chargebacks are something every merchant wants to avoid, as they can result in lost revenue. Read the information below to learn how to avoid chargebacks, or manage them efficiently when they do occur.
Tips for Preventing Chargebacks
The best way to prevent chargebacks is to establish best practices at the point of sale that are followed consistently by all employees. The following are tips to help you avoid and prevent chargebacks that can be implemented in your transaction process:
- Never alter a sales draft.
- Always obtain an authorization for the exact amount of the transaction processed to the card.
- If authorization is declined for the full amount of the sale, don't try to get an authorization by "splitting" or lowering the amount of the transaction.
- If you can't get a single authorization for the full amount of the sale, decline the credit card transaction. Request another form of payment.
- Whenever a card does not successfully swipe and you have to key in a transaction, manually imprint the card and ensure the signature and all transaction information is transferred to the imprinted draft. Make sure the manual draft is imprinted with the merchant name and location.
- When a customer is due a credit and the original sale was made on a Visa, MasterCard or Diners Club® card, process the credit back to the original card number. Do not refund by check or cash. If credit is due on more than one sale, process each credit individually.
- Have your return policy pre-printed on the credit card sales draft and signed by the cardholder at the time of the original sale. The refund policy must be close to the cardholder's signature to be recognized by Visa or MasterCard.
- Always compare the cardholder's signature to the signature on the back of the card. If the signature panel is blank, have the cardholder sign it. If the cardholder refuses, you should request another form of payment.
- Respond to all returned retrieval requests with valid, legible documentation. After allowing Chase Paymentech two business days to process your response, call the automated voice system to confirm that your response was received and to get a confirmation number.
- Be sure to compare the credit card account number on an electronically printed draft to the credit card number embossed on the credit card. If the numbers don't match, call your Automated Voice Authorization Center and tell the operator that you have a "Code 10" authorization and that the card numbers do not match.