Home Business Chargeback Fraud Tips And Tricks For Every Business

Chargeback Fraud Tips And Tricks For Every Business


Chargeback-based frauds are on the rise. These frauds have crippled many businesses. That’s why you shouldn’t leave your business exposed to chargeback fraud. Protect your business. Bring in the right card machines for business. Employ the following tips and tricks to design a system that protects your business from chargeback-related frauds.


Chargebacks typically occur when a purchase gets reversed. When a card company initiates a dispute, the customer might request their money back. At the same time, the customer could dispute a purchase they made for various reasons. And these include:

  • Inaccurate charges on their credit card
  • If the customer didn’t receive the items they purchased, they could easily dispute the purchase.
  • They might also have been incorrectly billed or their information could have been utilized fraudulently
  • Another possibility is that your return policy could be unclear. This could make your customers find it hard to initiate a return.

How Does It Work?

Chargebacks are often initiated when a customer disputes a purchase made on their bill. For them to launch the dispute, they must clearly indicate why they think the charge is an error. Plus, they should provide clear proof of their position. To keep customers happy, most of these disputes end up in their favor as a chargeback.

How To Protect Your Business Establishment

Track All Chargeback Codes

Keep yourself updated on the latest chargeback codes. Remember, chargeback codes aren’t static or permanent. If a customer claims that the charge you made was deceitful, for instance, but you have evidence that their claim isn’t genuine, you can decide to disputer their dispute, and consequently, overturn the chargeback. Being conversant with chargeback reason codes can also go a long way in assisting you to understand why customers are requesting chargebacks.

Precise Documentation

Keep all signatures and receipts. Maintaining meticulous records of such important records can be incredibly beneficial. And this is particularly true if you have physical records. You can as well utilize a digital technology solution to keep records around card-based transactions.

Use Technology

Authentication methods such as 3D Secure were designed to enhance the security of card payments and safeguard merchants against chargeback liability. The protocol typically shifts liability to the issuer of the card, instead of landing the chargeback responsibility on the merchant.

When you invest in 3D Secure, you’ll also find it easier identifying fraudulent chargeback opportunities before they occur. And by identifying potential high-risk transactions beforehand, you’ll be able to create custom rules for all transactions, hence reducing the risk of disputes.


Train your payment team on guidelines from the payment processor. This should include payment process compliance-based protocols. Training will help them spot and flag any suspicious activity. Thus, train your employees on the best ways to handle payment processing transactions. Training will protect your business. Among other things, training will help you come up with ways to identify any possible risk, making your payment process secure.

Payment Descriptions, Merchant Name

Consistency is key. Thus, ensure that the details in the payment receipts match that of your company. For instance, if a customer doesn’t recognize a transaction, he/she may initiate a chargeback. However, if your name is appearing on the receipt, the customer won’t think about initiating a chargeback. Thus, save that your company from serious chargeback-based hassles by ensuring that all your company’s details are appearing on the receipts. Plus, this will boost your brand.

Customer Care Desk

According to the stats, about 81 percent of customers who initiate disputes admit that they do this because of convenience. That’s why you should have all customers’ issues resolved promptly before they can escalate into real problems. One of the best ways to eliminate fraud is by having a 24/7 customer care support center. Here, customers can reach you anytime. These issues can be addressed on a real-time basis. Thus, all product or service issues can be solved quickly. This includes delivery delays and returns policy issues.

Of course, launching a dedicated customer care desk takes time and resources. However, it’s important to think about a customer care desk to minimize chargeback fraud-related issues. Remember, excessive chargeback issues can injure your business. It can also lead to several legal implications. Thus, consider having clear and concise return policies. Put these policies on your website. Still more, consider having frequently asked questions to help customers understand how you operate. This will eliminate confusion from the side of customers.

Clear Purchas Description

Ensure that the purchase is clear and concise. For instance, the receipt should clearly have product descriptions. It should include the price and time of delivery. Not having clear descriptions exposes your business to chargeback issues. Thus, ask your team to come up with clear descriptions.

Proper Record Keeping

If you are running a commercial kitchen, keep clear records. Record keeping is an important aspect when it comes to the running of any business. With proper record keeping, you can easily trace transactions and even respond to chargeback issues in a concise way. Thus, have records of purchase history, inventory, and shipment. Consider backing up these records. You can use cloud computing to back these records. Also, have clear records of the custody chain. This will help you track the product until it arrives at the customer.

Follow Protocols

Of course, you need a plan. However, it’s important to follow the processing protocols issued by your merchant. This includes issues like checking the CVV codes, signature authenticating, and matching information. Don’t skip any step. Follow all the rules and protocols. It’s also important to come up with internal policies that complement those from the payment processing unit.

The Bottom-Line

Of course, online payment is good. It gives your customers a convenient way to make payments. They don’t have to come to your store to make payment. However, online payment comes with challenges. One of the biggest challenges is chargeback fraud. Luckily, you don’t have to suffer from this fraud anymore. With the above tips and tricks, you can eliminate chargeback fraud and let your business thrive.

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