Preventing Credit Card Chargebacks

They say the customer is always right, and that’s a good philosophy for running a successful business, but when you find that too many customers are reversing the charges on their credit card (chargebacks), you have to do your part to reduce them. Luckily, there are many things you can do. For each chargeback, you pay a fee, plus if you get too many, your processing account could be closed. There are several reasons transactions can be disputed and returned but most chargebacks occur as a result of fraud. If you can reduce fraudulent transactions, you’ll have fewer chargebacks.

When the card is presented to you, check the expiration date and signature panel. If there’s no signature, check the customer’s ID and ask the customer to sign the card. If the customer refuses, don’t accept the card. Always get an authorization of every transaction by swiping the card through your terminal. If the card won’t swipe, follow manual key procedures and get a card imprint. Be sure to match the name on the account number of the card to the information on the receipt and match the printed four-digit number to the embossed number on the card. And of course, always get a signature. Finally, look for the hologram. It will be on the front or back of the card and should reflect light and appear to move.

When the card is not present, always obtain an authorization. Ask the customer for the expiration date and include it in your authorization request along with the three-digit security code. According to Visa®, verifying the card code can reduce chargebacks significantly. It’s also a good idea to use the Address Verification System (AVS) that is a nationwide system that verifies the identity of the person claiming to own the card. It makes sure the address entered on the order form matches the cardholder’s billing address. By the way, not using the AVS will result in higher processing fees. Scrutinize orders from foreign countries extra carefully as AVS is not global.

If an order doesn’t seem quite right, call or e-mail the customer to verify that he or she placed it. If your business delivers products, use a carrier that requires a signature upon delivery. Be cautious when accepting orders from customers who use free e-mail addresses like Yahoo or Hotmail. Tracking them is almost impossible.

Finally, make sure you respond quickly to every customer service request. If customers think they are being ignored, they will call their credit card company, which will result in a chargeback.

For more information on chargeback prevention, please call your First Data Independent Sales (FDIS) representative at (800) 616-1899.

Based on your payment processing needs a customized quote is just a phone call away at 1-800-616-1899.  You can also email us at: info@fdis21.com with a brief description of your processing needs and we can come up with the best solution for you.

First Data Independent Sales (FDIS) is a leading provider of secure payment technology and services. So whether your business is brick-and-mortar, on the web, or mobile, FDIS allows you to offer your customers nearly every type of payment option, so you may never turn away a sale.

FDIS uses First Data’s processing engine. First Data makes buying and selling easier. Many of you do business with First Data everyday, although you may not realize it. Whether you're writing a check at the gas station, using your ATM/debit card to pay for groceries, buying a book online, getting cash out of an ATM, paying for dinner with your credit card or using a gift card to purchase something special, chances are your transaction is moved quickly and securely by First Data.

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