Dealing with Chargebacks
Here we will advise you what a chargeback is, how it can impact your business and outline some common reasons why a chargeback would be raised.
A chargeback is the reversal of a previously cleared transaction; the cardholder’s account is credited with the amount of the sale and the merchant’s account is debited.
A chargeback is initiated by the issuing bank, either at the request of the cardholder or when the issuing bank sees the need to do so.
Common reasons for chargebacks include:
- Fraud enquiries, where the cardholder denies participating in or authorising a transaction
- Non-delivery, where the cardholder disputes the sale for reasons such as failure to receive goods or services
- Quality, where the cardholder disputes the sale for reasons of quality
- Where the customer does not recognise the transaction on the receipt or statement
- Where no valid authorisation was gained
- Where no valid authorisation for current transaction (using old authorisation code)
In certain circumstances a cardholder or the card issuer has the right to question or dispute a transaction. Such requests can be received up to 180 days from the date of the transaction and in some circumstances beyond 180 days. If this happens, merchants should provide as much information as possible to connect the cardholder to the transaction, as this will assist in resolving the dispute.
All merchants accepting debit and credit card payments are liable for chargebacks in the circumstances outlined.