In the case of a chargeback, the burden of proof isn’t on the customer that files it; it is on you, the merchant. For many business owners, chargebacks management is an unpleasant reality of doing business.
Unfortunately, chargebacks are designed to serve the customer, not the merchant. Card networks report that merchants win only about 21% of chargeback payment disputes. Merchants are essentially guilty until proven innocent, with the onus on them to prove that they deserve financial remuneration for a product they have already sent out.
However, chargebacks serve the honourable function of protecting customers from losing money due to fraudulent transactions, or from merchants who don’t deliver as promised. There is hope for wronged merchants through ‘chargeback representation’. This is the process of fighting unwarranted chargebacks by submitting evidence to the customer’s bank.
Don’t forget - Once a customer disputes a purchase has been filed, there are 7 to 10 days where the customer can reverse it. This period is your chance to show that you can resolve the issue and cater to the customer’s needs.
This may seem obvious, but chargeback prevention is worth more than a cure. Chargebacks are often initiated by frustrated customers who don’t feel like they are being listened to. Adequately training staff in customer service, and providing clear channels for issues and refunds is a great way to reduce chargebacks in the first place.
Because the onus is on the merchant to prove that a chargeback claim is without merit, you should have as much evidence as possible. Keeping accurate and detailed records is the best way to do that. For your end, this includes confirmation emails, follow-up emails, invoices and evidence of delivery. It is also good to have any communication between you and your customers, to prove that the chargeback was wrong or at least premature.
As soon as you see that a chargeback has been filed against you, act as fast as possible. The longer you wait, the more likely the chargeback is to stick. Because the onus is on merchants, doing nothing is an acceptance of guilt. Draft up a chargeback response letter ahead of time, so that you can customise it if the time comes and you’ll be as prepared as possible.
Payment help provide chargeback management software that helps merchants to not only fight chargeback disputes, but reduce the number of chargeback requests filed, by interrupting customer behaviour. Register with us here.