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The Complete Guide to Preventing and Winning Chargebacks

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Frank Kehl

Frank Kehl

Frank Kehl has been writing about merchant services, payment gateways, and international money transfer services since 2015. He has a Bachelor of Science degree from Penn State and a Juris Doctorate from the Ventura College of Law. After a long and enjoyable career of traveling around the world as an Air Force navigator, he’s comfortably settled down in the wine country town of Paso Robles in California’s scenic Central Coast region. He enjoys reading, photography, hiking, and numerous other outdoor pursuits.
Frank Kehl
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11 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Peter Thomas

    This happened to me. A $3,000 chargeback. The merchant services company stated they did the second presentation, since it was an ecommerce transaction through their own portal, I don’t even have the guys credit card number, etc. The merchant services company has been very reluctant to help me or talk to me. Huge company out of San Francisco. So, I am screwed out of $3,000.

      Kecci

      This is a great article thank you. I have a situation where we have travel retreats and a specific leader in their filed (ie: yoga) runs the tour. In the conditions it clearly states that in the unlikely event the leader cannot attend she/he has the right to replace themselves. It is also states that under no circumstances is chargeback permissable against the merchant taking payments on behalf of the leader and her/his business.
      If the participant signs and accepts that, is this enough to override if a client still trys to claim a chargeback? The tour is still running but with another leader.

        Jessica Dinsmore

        Hi Kecci,
        Unfortunately, merchants cannot force their customers to give up their right to file a chargeback. In this case, if a customer is being forced to sign away their right to file a chargeback as a condition of being allowed to participate, it’s very unlikely that the bank investigating the chargeback will decide in the merchant’s favor by upholding this agreement.

          Tressa

          I have a customer that bought a high-end item in person. Three months later he is not satisfied. I offered a full refund on return of the item. He said he would return it. A week later he has issued a credit card chargeback. He has not returned the merchandise. If he gets the money back with no return I feel as if he stole it. I don’t know any reason other than wanting something for nothing as to why one would issue a chargeback when the merchant has no problem refunding the money. If anyone has any advise I would be interested. Thank you for your time. Sincerely,

            Rod

            Great article. As a merchant services provider I would like to point out how important it is to only accept EMV Chip credit cards in your business. Any customer who swipes their credit card at your business can call their bank immediately and dispute the charge and win, whether they placed the order or not. If you cannot Chip the card, then take cash only.

              Small Business

              We own a small business and have been processing credit for 6 years. We switched processor 7 months ago and all seemed fine. This month we had a consumer call and say the payment they made never went through on their card. We checked and our machine was holding all transactions and not sending the batches in to be processed. We should have noticed but did not. This had been occurring for 4 months. We submitted our batch and 47 transactions in amount of over 5,000 are “late presentation”. Do you have any advise? Our processor said we will be charged a fee per transaction and the credit card bank can choose not to pay. Do you know if they choose not to pay if we can contact our consumers to see if they make payment? Thanks for your help.

                This comment refers to an earlier version of this post and may be outdated.

                Rookie

                I recently provided services and accepted an unsigned credit card. I do have a valid government ID documented, swiped card with authorization, and even a copy of the ID. Can these be used in lieu of a signed card. It seems from the merchant agreement that I am not supposed to accept unsigned cards. Please advise.

                  This comment refers to an earlier version of this post and may be outdated.

                  Tom DeSimone

                  While you are supposed to only accept signed cards (and compare the customer signature on the receipt to the one on the card), the reality is that most merchants do not do this. It’s a protocol that is designed to prevent fraud, but no one is going to check to make sure you are doing it. If they supplied government ID, that would be a sufficient alternative in my opinion. And the fact that you documented the ID will protect you if a chargeback does occur.

                  Hope this helps,
                  Tom

                    This comment refers to an earlier version of this post and may be outdated.

                    Rookie

                    Well, the issuer has stated that this transaction was non-compliant because I accepted an invalid credit card. The merchant agreement clearly stipulates that I must check all the card security features, and the fact that I did not verify if the card was actually signed (the amount exceeded the non signature requirement) is a clear breach of the merchant agreement.

                      This comment refers to an earlier version of this post and may be outdated.

                      Patrick

                      Great article. Question. I am a merchant that has signed agreements with my customer to put them on monthly auto-debit programs for the products I sell. When a customer monthly amount is declined for insufficient funds, I am able to do a force charge, where I am still able to receive the funds owed. Does this follow all the correct rules?

                        This comment refers to an earlier version of this post and may be outdated.

                        Tom DeSimone

                        Hi Patrick,

                        I’m not aware of any way to clear a payment if the money is not in the customer’s account, except at their bank’s discretion. Maybe you are referring to a resubmission (“re-presentment”) of the transaction? This can sometimes be done in the case of NSF, although there are limitations to the number of times a transaction can be resubmitted after it bounces, I believe. There are also time limitations with this. And it will only go through later if funds are made available.

                        But what you are describing does not violate any rules as far as I know.

                        -TD

                          This comment refers to an earlier version of this post and may be outdated.

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