Things to know on fraudulent chargebacks – Key to staying aware

If you’re a business owner, of any kind, whether you sell lightning gaming laptop deals or crossbow cocking device, you should have an idea of what chargebacks are. A chargeback is a refund of payment that is legally claimed by a cardholder from his card issuing bank. Whenever a customer isn’t satisfied with a purchase or he is not able to identify a transaction on his bank statement, he enjoys the right to dispute such a transaction and ask for a legal refund called a chargeback.

The card issuing bank instantly transfers the disputed amount of payment from the merchant account to the account of the customer and later on investigates the case to know who finally wins the chargeback.

Frequent situations when a chargeback may take place

  • The card was used by someone without the knowledge or permission of the owner
  • The owner of the card doesn’t identify the charge
  • The quality of the service or product was low or when the product was damaged
  • The customer didn’t get the product for which he paid
  • The customer placed an order multiple times without an intention
  • The recurring bill wasn’t disabled despite the subscription being cancelled

What to do in case of a financial chargeback

As long as chargeback prevention is concerned, here are the few steps that you can take:

  • You’ll have the right to dispute the fraudulent chargeback
  • You can also prove that the financial transaction was valid by offering evidence that is convincing enough. Send proofs that the service or product wasn’t delivered to the customer, the tracking ID and other vital documents
  • Don’t hesitate to seek help of a professional when things get out of control

Explaining the process of chargeback

If you don’t know what the chargeback process is, here are few facts that you should know on the procedure.

  • A cardholder can dispute the transaction via his credit card issuing bank
  • The card issuing bank will decide whether or not the dispute is legal and then sends the chargeback to the credit card network that forwards it to the acquiring bank of the merchant
  • The acquiring bank will let the merchant know about the chargeback and then the merchant will think of responding. In case the merchant wishes to prove the validity of the transaction, he will offer convincing evidence.
  • The card issuing bank will obtain the proof from the merchant via the card networks and acquiring bank. In case the issuing bank thinks that the evidence offered by the merchant is not sufficient for the dispute of the chargeback, the cardholder wins it and retains the funds.

Therefore, now that you’re aware of what chargeback is, you should know the root cause of it. Every business faces this kind of fraudulent chargeback as we are currently living in an era of frauds and cybercrime. Staying aware and taking preventative measures is the key.