Customers Dispute Chargebacks

Chargebacks are one of the most important issues that small business merchant account users have to deal with. Not only are they costly and time consuming but, if left unchecked, they can potentially cause the suspension of the credit card processing account. Certain industries are more prone to chargebacks than others and, as a result, the payment card processing rate for merchants operating in these industries is higher. Customer disputes are one of the most common reasons for chargebacks. There are a number of possible reasons but a customer will most often dispute a transaction because:

• A credit has not been processed when the customer expected it would be.


• Product or service ordered was never received.


• A service was not performed as expected.


• The customer did not make the purchase; it was fraudulent.

Because chargebacks, resulting from customer disputes, may indicate customer dissatisfaction - and the potential for lost sales in the future - addressing their underlying causes should be an integral part of your customer service policies. Your credit card processing practices can be optimized to minimize or avoid the possibility of misunderstanding. For example you should deposit your transactions on the date the merchandise is shipped, not on the date the order was taken.

If a cardholder with a valid dispute contacts you directly, act promptly to resolve the situation. Issue a credit, as appropriate, and send a note or e-mail message to let the cardholder know he or she will be receiving a credit.