Chargeback Prevention

Although chargebacks cannot always be completely avoided, there are steps you can take to help prevent them. The more you know about processing procedures, the less likely you might be to do, or fail to do, something that could result in a chargeback.

Tips for Internet and Mail Order/Telephone Order (MOTO) Businesses

• Use the Address Verification System (AVS) to ensure that your customer is providing you with the correct billing address.
• When sending merchandise to a customer, use a shipper that will be able to provide proof of
  delivery to the full billing address should there be a dispute.
• Only ship merchandise to the billing address provided.

Procedures for Retail Businesses

• Have proof the card was present by making sure you swipe all cards through your terminal.
  Get a signature from the cardholder and compare that signature to the back of the card. Check
  additional identification if necessary. If the card is unsigned, request a photo ID that has a
  signature, and have the cardholder sign the card. Otherwise, don’t accept the card.
• Get an imprint whenever a card has to be manually keyed into a terminal. Be sure that all of
  the transaction information shows up on the imprinted copy including the amount, merchant
  name and location, and the cardholder’s signature.
• If the credit card is declined when swiped through the terminal, do not continue to try and get
  an authorization. Instead you should request a new form of payment from the cardholder.

Common Reasons for Chargebacks

• The card was fraudulent.
• Cardholder disputes the quality or receipt of merchandise.
• The amount charged to the card was incorrect.
• Processing errors were made during the transaction.
• Proper authorization was not obtained.
• Merchant did not fulfill a retrieval request.