Using Customer Data to Manage Chargebacks

Using Customer Data
Using Your Customer Data to Manage Chargebacks
Chargebacks and disputes are a part of doing business, but they don’t have to be handled at the cost of doing business. Most merchants already have the tools to prevent disputes and recover losses from chargebacks, and all it takes is a little strategy and time to protect and recover revenue.
To win any case, whether in court or a payments dispute, you need facts. Merchants have access to an arsenal of transaction and customer facts in their CRM and receipt data. It’s just a matter of knowing what data are required to recover lost revenue and for what type of chargeback.
Understanding the Chargebacks Affecting Your Business
 The types of chargebacks you receive can be based on how you do business and/or what type of business you’re in. For instance, a subscription-based company will see a lot of Cancelled Recurring chargebacks because customers will file a chargeback with their card-issuing bank rather than just calling the merchant to cancel their subscription. An example of chargebacks based on how a merchant does business would be Credit Not Processed. This happens when a customer returns a purchase and does not receive a refund or response from the merchant. The main point being, don’t avoid chargebacks and let them pass their freshness date sitting on your desk, resulting in lost revenue. There’s a lot to be learned and money to be reclaimed if you address and fight chargebacks.
Addressing Chargebacks with Factual Data
Of course, both of the above chargeback examples can be won if the merchant can prove proper protocols were followed. The goal is not handing over great data volume, it’s assembling relevant data as compelling evidence in a concise, effective response.
Compelling evidence for Cancelled Recurring chargeback may include:

  • Proof cancellation policy was understood, signed, and accepted by the customer
  • Proof policy is clearly posted on the company website with cancellation instructions
  • Justification of why the subscription was not cancelled
  • Proof a renewal notice sent to the customer

Compelling evidence for a Credit Not Processed chargeback may include:

  • Proof customer was refunded for their purchase
  • Proof customer was not entitled to a refund
  • Proof customer was shown refund policy prior to purchase
  • Justification why the customer was not entitled to a refund.

Some Common Reasons for Chargebacks
Below are six common reasons for chargebacks, with reason codes:
Fraud – Card Not Present
10.4 (Visa), 4387 (MasterCard), F29 (AmEx), UA02 (Discover)
Transaction Not Recognized
4863 (MasterCard), R04 (AmEx), AA (Discover).
Goods or Services Not Provided
13.1 (Visa), 4855 (MasterCard), C08 (AmEx), RG (Discover)
Not as Described or Defective Merchandise
13.3 (Visa), 4853 (MasterCard), C31 (AmEx) and RM (Discover)
Cancelled Recurring
13.2 (Visa), 4841 (MasterCard), C28 (AmEx), AP (Discover)
Credit Not Processed
13.6 (Visa), 4860 (MasterCard), C02 (AmEx), RN2 (Discover)
Important Data for Chargeback Representment
Since submitting chargeback representments is a time-sensitive process, it is most beneficial to keep data organized and ready to be put to work. Below are some of the most common data used as compelling evidence for a broad range of representments.

  • Transaction information
    • Receipts
  • Proof of Delivery / Shipping Confirmation
  • Packing Lists
  • Customer Communications
    • Emails
    • Phone call log
  • Copy of Return Policy / Terms and Conditions
  • Rules for Cancelling Subscription Accounts
  • Digital Download and Usage Information

Don’t forget to include a concise cover letter stating your case with every representment.
Address Chargebacks as a Part of Doing Business
Unless you address chargebacks, you’ll be victimized by them. So, take the necessary steps and prepare to win back lost revenue. Make sure you’re organized, know where your data is, and prepare to put it to work. Get familiar with the CRM software, payment gateway, customer service software, how and where your data is stored, and understand how to retrieve it.
If the issuer has a preference for how the evidence is to be presented, be sure to follow it. Also know the monetary tolerance where pursuing a chargeback representment may or may not be financially beneficial for your business.
For further information, get Verifi’s complete chargeback guide here.
Join our “Data is the New Currency” webinar to learn more about managing disputes and increasing profits.  Register here.