everything you need to know about chargebacks

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Page 1: Everything You Need to Know About Chargebacks
Page 2: Everything You Need to Know About Chargebacks
Page 3: Everything You Need to Know About Chargebacks

EVERYTHING YOU NEED TO KNOW ABOUT CHARGEBACKSA GUIDE FOR BUSINESSES

Page 4: Everything You Need to Know About Chargebacks

➢ A credit card company withdraws the money for a transaction from a merchant‘s account and deposits it in a consumer’s, following a dispute

➢ Specifically, it is the reversal of a prior outbound transfer of funds from a consumer’s bank account, line of credit, or credit card

WHAT IS A CHARGEBACK?

Page 5: Everything You Need to Know About Chargebacks

7 CAUSES OF CHARGEBACKS

1. Fraudulent transactions: card used without the consent of the cardholder

2. Credit not processed: merchandise returned, but refund not issued

3. Goods not received: customer did not receive the item

4. Technical problems: issues between banks and merchants may lead to errors

5. Authorization not obtained: often a result of merchants forcing a transaction

6. Recurring transactions: subscriptions processed after a cardholder cancellation

7. Friendly fraud: dishonest buyers who reverse charges while keeping merchandise

Page 6: Everything You Need to Know About Chargebacks

NOT-SO-FRIENDLY FRAUD

86%

Global Risk Technologies (GRT) recently found that approximately 86% of chargebacks are friendly-fraud, and many consumers bypass merchants to directly file complaints with card-issuing banks.Source: http://www.paymentscardsandmobile.com/86-of-fraud-in-chargebacks/

Page 7: Everything You Need to Know About Chargebacks

NOT-SO-FRIENDLY FRAUD

Merchants are paying $100 billion in fraud losses due to unauthorized transactions, fees and interest associated with chargebacks - nearly ten times the cost incurred by banks. Source: http://hubpages.com/business/The-Impact-of-a-Chargeback-to-You-as-a-Merchant

COST TO MERCHANTS

COST TO BANKS

Page 8: Everything You Need to Know About Chargebacks

THE CHARGEBACK PROCESS

STEP 1:Cardholder files a

complaint with the issuing bank

STEP 2:Issuing bank

investigates the validity of the claim

STEP 3:Issuing bank provides a

provisional credit and requests funds from the acquiring

bank

STEP 4:Acquiring bank investigates and

declines the chargeback or

requests information from the merchant

STEP 5:Merchant provides needed documents,

bank applies relevant rules. If the claim is

false, the cardholder will be charged again

for the sale

Page 9: Everything You Need to Know About Chargebacks

WORRIED ABOUT CHARGEBACKS?

But don’t worry!

Chargebacks CAN be avoided…

Page 10: Everything You Need to Know About Chargebacks

HOW TO AVOID CHARGEBACKSThe Authorization Process

Obtain an authorization approval for every transaction

Avoid using voice authorizations

Reauthorize anything more than seven days old

Page 11: Everything You Need to Know About Chargebacks

HOW TO AVOID CHARGEBACKSSecurity Precautions

Verify card security codes

Exercise extra caution when the shipping address is different from the billing address

Work with a secure PCI DSS certified payment processor

Page 12: Everything You Need to Know About Chargebacks

HOW TO AVOID CHARGEBACKSThe Refund Process

Require customers to agree to your refund policy

Process refunds in a timely manner

Have a “no-questions-asked” refund and cancellation policy

Page 13: Everything You Need to Know About Chargebacks

HOW TO AVOID CHARGEBACKS

The Authorization Process

Be reachable so customers can contact you with issues instead of initiating chargebacks

Email customers confirmations with the details of each transaction

Call, fax or email any large or suspicious orders to ensure the order is legit

Do the final check -> confirm the customer’s identity and get signatures on orders and receipts

Communication

Page 14: Everything You Need to Know About Chargebacks

www.3Gdirectpay.comJumuia Place, Block #1 Lenana Road Nairobi, Kenya+353 1 8764849+44 20 35148393

CONTACT US – WE’RE GLAD TO HELP

Page 15: Everything You Need to Know About Chargebacks