A credit card chargeback is when a cardholder disputes a charge posted to their credit card account.
Chargebacks can occur for various reasons.
When a card was not authorized by the cardholder. (Stolen or fraud).
When a merchant fails to provide the requested products or services.
Chargebacks can be avoided by providing good customer service and that the merchant products and/or services as offered.
For those chargebacks related to fraud, there are simple steps every business can take to help avoid any problems.
Here are some examples:
Always compare the signature on the receipt with the signature on the
back of the card.
Always examine the card to ensure it is not altered or suspicious looking.
Request identification such as a license or some other picture ID.
If your business is taking credit card without the customer present
(Mail-Order, phone, internet), the chance of fraud-based chargebacks is much greater.
It is very important for these businesses to put systems in place to help determine legitimate charge activity.
If appropriate, call customers to confirm their order if the billing and shipping or contact addresses do not match.
Ask for the code number on the back of the card (or front with American Express¨) to confirm that the card belongs to the customer.
If you believe that a card is questionable or fraudulent, always call the card issuing company for a voice authorization
Note: Voice authorization adds additional fees to the cost of a transaction.
