A chargeback is when a customer contacts his/her credit card bank directly to dispute a charge on his/her account.

The chargeback process will vary depending on the processing bank you use, but one thing remains the same- the chargeback process can be cumbersome due to the fees charged and the time spent disputing chargebacks.

With the introduction of chip cards, the threat of chargebacks due to fraud is growing, especially for online businesses.

There are two main reasons that chargebacks occur:

  1. The customer doesn’t recognize the charge and reports the transaction as fraud
  2. The product/service was not received or it did not meet expectations

Follow these tips to help prevent chargebacks and to be vigilant for fraudsters:

  • Recognizable Name:
    The Doing Business As (DBA) name on merchant account applications is the name that will be shown on the customer’s credit card statement. The most recognizable name to customers is the website URL on which they made a purchase. If you’re not using the website URL, make sure to display the corporate name everywhere on your site and even at checkout to remind the customer of the name that will appear on his/her statement.


  • Easily Accessible Contact Information:
    Have full contact information for your business on the website. Most businesses will put full contact information in the header or footer of the site so that the customer can see the contact information on every page. If the customer cannot contact your business, he will contact his bank to dispute the charge.


  • Check the Addresses:
    Fraudsters will use stolen credit cards to purchase products and then will ship the products to an address other than the billing address. There are different ways to verify the address:
    1. Contact the customer if the shipping address is different from the billing address to ensure the address is where they want their products shipped to.
    2. Check the IP address to which the order came from. If the IP address is nowhere near the billing address, double check with the customer.
    3. Make signatures upon delivery mandatory to ensure the package is received by the correct person. This signature is vital to winning chargebacks for item not received.

  • Detailed Return/Refund Policies: Businesses need to have clear return or refund policies easily accessible on their websites. Some businesses have also included a place on the checkout page where the customer must agree to the terms and conditions before completing the checkout process. Those checkboxes help many businesses win chargeback disputes.

Chargebacks can be very costly and very scary. Knowledge is power, especially when it comes to preventing chargebacks. Know your customers and make sure your customers know who you are.

This was a guest blog post by Persolvent. Persolvent has been a preferred payment processor for 3dcart for over 10 years. Contact Persolvent today to improve your payment processing fees and services. If Persolvent can’t meet or beat your current rates – Persolvent will pay you $100! 


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