As a merchant, one of the things you’ll need to look out for to protect your bottom line and standing is chargebacks. Do you remember the old days when an unsatisfied customer would go back to the store where he or she bought the item and ask for a return? While this does still happen, more customers are reporting charges to their issuing bank instead. The issuing bank then reverses the charge and gives them a credit. Obviously, the issuing bank will want its money back, so it will debit the merchant’s bank who, in return, will debit the merchant. Merchants with an extensive history of chargebacks could be denied a merchant account as they pose a risk. In addition to that, the merchant will have to pay fines and face other penalties for chargebacks. So, as a merchant, you’ll want to avoid chargebacks whenever you can. So, how do you accomplish this? First, let’s look at a few of the reasons why a merchant might get hit with a chargeback in the first place.
Common Reasons for Chargebacks
- Customer doesn’t remember or recognize a specific charge on his or her statement.
- Authorization procedures were not followed.
- The order was not received by the customer, or the item was defective or not as described.
- Cardholder has cancelled the order and returned it, but he or she has not received a credit.
- Customer was charged twice for the order.
- Customer has cancelled an ongoing subscription and is still being charged.
