It’s important to remember that as a merchant you do have rights and can fight back against credit card chargebacks. All too often we hear from merchants who mistakenly believe that they are helpless in responding to chargebacks and are simply at the mercy of the customer. This could not be further from the truth. You do have rights and you can respond to and fight back against credit card chargebacks.
The more knowledge and understanding you have about chargebacks, the better off you will be. This knowledge translates into better business practices, improved communications, proactive customer service, improved use of integrated solutions, and the ability to respond and react without panicking when you do receive a chargeback.
The Credit Card Chargeback Process
 Chargebacks were introduced to protect customers from credit card fraud. It may appear that the chargeback process was designed with only the customer’s needs in mind. However, as you learn more about the chargeback process, you can see that merchants are just as important as the customer. The misconception with whom the credit card chargeback process really serves is lacking in information.
This lack of information results in confusion, mistakes, errors, and ultimately a failure to correctly represent your case when fighting a chargeback. To make sure you’re ready to respond to chargebacks, let’s take a look at some of the most common mistakes made and how you can ensure you’re able to avoid these.

  • Not having the correct documentation To respond to a chargeback, you must provide the required documentation. Each chargeback comes with its own set of documentation requirements, and knowing the details of the reason code will go a long way in building your representment case. Generally, you’ll need to provide the following documentation: proof of delivery (a signed receipt for the goods will help you a lot), CVV evidence (proof that the CVV was provided helps to validate the purchase), refund/return policy (all credit card issuers require proof that your return/refund policy is clearly visible throughout the sales process), and all documented communication (this includes any communication with your customer service team or other general inquiries).
  • Taking too long to respond Time is of the essence when responding to a credit card chargeback. The customer has up to two years to file a chargeback, but you do not have similar liberties with time. Typically, you have a maximum of 45 days from the date of the chargeback to respond with representment. When you factor in the time it takes for you to be notified of the chargeback and then conduct representment, often you’ll have about 14 days to collect your evidence and respond to the chargeback.
  • Wasting your efforts When there is an absence of communication between you and your acquirer, you may discover that you’ve been preparing a case for a chargeback that the acquirer is already addressing. There are scenarios when the acquirer decides to push back against the chargeback, meaning you don’t need to spend your time on responding. It’s up to you to know the practices of your acquirers and how they respond to chargebacks and if they have an automatic representment process in place.
  • Being complacent You spend a lot of time and resources developing, researching, marketing, and building brand loyalty—which is why you can’t become complacent in the face of credit card chargebacks. Make sure you have solutions in place that allow you to track and monitor every chargeback from start to finish. This allows you to see common themes and issues that can be contributing to chargebacks. You might also learn of holes in your system that make it easy for customers to commit fraud, or learn that your refund/return policy is not as clearly displayed as you beleived.

Respond to Chargebacks with Real Solutions
In an ideal scenario, you’d be able to respond to credit card chargebacks alone. You could respond with your rebuttal letter, provide your evidence, and wait optimistically for a win.
The chargeback process is cumbersome, slow, and difficult to navigate. You need to have right solutions in place. A solution such as Cardholder Dispute Resolution Network (CDRN) works for you to prevent chargebacks from occurring, to collect data and information about your sales and customers, and provides you the tools you need to correctly respond to credit card chargebacks. You need real solutions and experts working for and with you to help provide exactly what your business needs.


Although online sales are an accepted—and often preferred—method of doing business, there is still lingering uncertainty with online payment security. Some of your customers simply might never come around to buying your products or services online and will insist on doing business over the phone, in person, or by mail. Even though there is inherent risk with these tried-and-true sales models, it’s always best to keep in mind that the customer is king and do your best to provide for their needs. In any case, it is the merchant’s responsibility to deliver a simple-to-use payment solution that protects everyone involved, so your customers feel secure and you know you’re preventing chargebacks.
It takes striking the right balance to implement a secure online payment solution that works for you to prevent chargebacks, and yet isn’t so restrictive that you end up losing real customers and sales. This is a problem that many CNP and CP merchants face: how to protect everyone involved in the sales cycle, including the customer, the bank, yourself, and your brand.
Walking the Fine Line of Payment Security and Chargeback Prevention
The more trust your customers have in your website, the more likely they are to purchase your products or services. This is why you need a payment solution that handles the authentication and authorization final checkout in a smooth and simple manner. If your customers have to go through what they consider to be too many verification steps or are forced to enter a password multiple times, they are likely to give up and look elsewhere for the product or service.
This all comes down to the decisions you make on how to manage payment processing and authorization. Too strict with too many verification questions and you’ll lose customers. Too relaxed with little or no verification and you’re likely to be a victim of fraud, and you’ll lose customers who don’t think your website is secure enough.
Along with taking advantage of a merchant-specific solution, such as Verifi’s Cardholder Dispute Resolution Network (CDRN) to prevent chargebacks and enhance your online security, be aware of all your security options, including:

  • SSL-protected website  Customers expect to use an SSL-protected website when entering their credit card information. The recognized “https” at the beginning of a website’s address has become one of the standards of security that consumers have come to count on.
  • Complex but not complicated passwords  It’s very important that you have a payment solution in place that actively enforces a high level of password security. Demanding that your customers enter passwords that are overly complex and long will cause them to quickly become frustrated with the password rules. Be specific in the password rules that you provide, including uppercase, lowercase, numeric, and a set number of symbols and length that are allowed or required.
  • New technologies  Is your business PCI-compliant? Do you accept only EMV or chip-enabled credit and debit cards? Have you begun to learn about biometrics and how this can add a layer of security to your payment solution? These techniques as well as tokenization can go a long way in preventing chargebacks.
  • Address verification  Never accept a credit card payment without confirming the customer’s billing address. Errors in the billing address, such as a mistake in the Zip Code or using Road instead of Street, often are indicators that the credit card is stolen. Some merchants have restrictive rules on accepting orders that are delivered to an address other than the billing address. It may be worth adding in an extra step to confirm the different delivery address.
  • Know your customers  When using a payment solution such as Intelligence Suite to prevent chargebacks, you’re doing more than stopping fraud—you’re learning valuable information about your customer base. This allows you to eliminate the bad actors or risk factors before they become a problem and result in costly chargebacks and revenue loss. You also learn about your customers’ interests, buying habits, and location—all of which happens behind the scenes and work to limit your risk.

This is just a small sample of some of the online payment security measures you can take to protect your business.
Another vital aspect to your online security and chargeback prevention is your customer care policies and implementation. Clearly communicating important details such as return policies and shipping options to your customers can help greatly in fraud prevention, as well as provide necessary evidence in the chargeback representment process. Make sure your customer care team has the right tools in place to record all communications.


As a merchant who counts on travel and tourism, this is one of your busiest times. Customers are frantically wrapping up summer vacation plans, and some might even be planning for excursions in the fall. This is good news for your business, but as you know this busy sales time means your risk for fraud and loss is likely to increase. You’re extra busy, your customers are out of their comfort zone and a bit stressed, so you push aside second thoughts about a customer’s lack of documentation for transaction authorization, and then a few weeks later you learn you’ve become a victim of chargeback fraud.
The success of your business relies on the ability to meet the needs of your customers quickly and efficiently. The increase in online sales and websites that enable travelers to book their own hotels, flights, cruises, car rentals, and other travel needs makes it more challenging for you to carefully review each purchase.
Travel typically comes with big ticket price tags. For example, a cruise package that includes flights, a couple nights in a hotel, port excursions, extra boat perks like WiFi, and then a post-cruise tour of the home port can add up to a very large sale. Just as your customer invests a lot in their cruise vacation, you must spend a lot on resources to find the best package for your customer—and as you know, the profit margin is tight with today’s competition in online sales. This adds up to a lot of risk and the need to be vigilant with your customer authorization and authentication process.
Be on the Alert for Fraud
It’s too easy to become a victim of chargeback fraud, particularly when you’ve got stressed out customers who want to book last-minute flights or desperately want to buy tickets to the latest big show or event. Understandably, it’s challenging to take a step back to remind yourself of fraud prevention best practices. To that end, keep in mind the following fraud warning signs:

  • Rushed purchase  Often a fraudster will contact you in a panic, rushed to set up accommodations for their traveling party. Make sure you take the time to validate the credit card, passport details, and other relevant verification documents. If you’re operating your business without a proven payment solution in place, be cautious of the credit card being used—often these fraudsters are using stolen credit cards.
  • First-time customer  Folks who regularly travel often establish a relationship with a specific travel company, allowing the merchant and the customer to build on that relationship which fosters customer loyalty. Be aware of a first-time customer who calls you or contacts you online to make a large purchase. As always, collect all necessary verification information, and especially take advantage of a merchant payment solution such as Verifi’s Order Insight to help prevent chargeback fraud.
  • Customer location  We’ve all heard the stories of Internet requests for money transfers to a foreign country or the plea to send money to free a trapped relative. Today’s fraudsters have learned that VoIP phone service can be the ideal tool to hide their true location, tricking a sales agent into believing they are calling from a local number. If you have concerns over the customer’s location, seek to provide for the customer to come into your shop to pick up goods or services, or request a signature for delivery.
  • Conflicting billing and delivery addresses  When a customer enquires about a cruise package, for example, but wants the tickets delivered to an address that is different from their billing address, red flags should go up. This is one of the most common fraud techniques, using different addresses for billing and shipping.

The common element in these fraud prevention tips is about making sure you don’t let the customer pressure or rush you into approving their purchase. It’s vital that you follow best business practices, including requiring necessary travel documents (passport, driver’s license, etc.) and not skipping any steps in the credit card authorization and authentication process.
Chargeback Fraud and Travel Purchases
Recent research has revealed that the items sold most frequently—cruise packages, flights, and resort packages—are impacted most by chargeback fraud. These are typically big ticket sales that require the most work on your part, so be sure to remember our chargeback fraud prevention warning signs and take extra steps to protect your business.
The travel industry is not immune to fraud, theft, and the threat of chargebacks. The simplicity of CNP sales and the prevalence of phone bookings make it easy for fraudsters to prey on travel merchants. Take the steps you need to be confident and comfortable with each sale.


When credit cards were introduced, consumers, banks, and merchants were concerned about data security and theft. When online banking was introduced, many people were slow to adopt due to concerns for the security of their banking information and the risk of fraud. PayPal introduced a new type of online payment that was used initially by outliers and other early adopters, again with many consumers concerned about the safety of their money.
Now, buying online or in other card-not-present (CNP) scenarios is ubiquitous, and most consumers, banks, and merchants give little thought to the issues of secure data and credit card fraud. This can be seen as both good and bad. Good because implicit confidence makes it easier for merchants to market and sell online, building strong relationships with customers. It’s bad because it instills a false confidence, leading consumers to assume they are 100% protected from fraud. Complacent customers become very alarmed when their data is violated.
When a security breach occurs, typically the negative media coverage and resulting social media outrage focuses on you, the merchant, and the risks of doing business. This can mean the end of your business, and that’s exactly why you need to take measures to make sure consumer data is secure and that you have proven fraud reduction measures in place.
Reducing Your Fraud Risk
The harsh reality is that it’s up to you to mitigate and reduce credit card fraud risks. Your customers and their issuing banks need to know that you’re up to date with the latest in data security technology.
At a minimum, make sure you have the following data security measures in place:

  • EMV support  EMV, or chip card, is now the international standard for credit and debit card security. The technology embedded in the microchips on these cards was developed to protect everyone involved in the transaction. Unfortunately, with EMV we are seeing a sharp increase in omnichannel fraud, meaning you need a layered approach that includes the use of cybersource tokenization.
  • PCI compliance  PCI compliance is designed to protect consumer cardholder data during the entire e-commerce transaction. It’s imperative that you adhere to these regulations and standards; however, remember that PCI compliance is not the complete solution. You still need a solution that provides encryption, merchant partner data protection, and limited access to cardholder data. Using a solution such as our Global Payment Gateway provides you everything you need to be PCI compliant, while keeping your overall costs down.
  • Password security  While customers are typically resistant to creating long alphanumeric passwords, it’s important that your payment solution requires customers to employ a password that meets basic—if not advanced—security encryption standards. In fact, many payment solutions are going beyond a standard password and use multi-factor authentication to increase data security and reduce fraud.
  • SSL protocol  Your online payment system must use SSL (Secure Socket Layer) to provide an additional level of data security. Many customers are familiar with SSL and will expect to use only an encrypted HTTPS website or mobile interface. It’s a good idea to include some information on your website about your use of SSL and how this enhances consumer security and fraud protection.
  • Secure customer data  Ensure your customer service team is up-to-date with and following best practices to protect customer data. Instruct them to never give out credit card information, addresses, phone numbers, or passwords. Customers are expected to provide their credit card information and to confirm their identity with security questions and address verification.

We cannot stress enough that you are responsible for the security of customer data. As we’ve learned from recent major online security breaches, consumers are not interested in the underlying causes for the breach: they are focused on the risk of conducting further business with any merchant whose security has been breached.
Data Security Is a Must
Good customer service, brand loyalty, a vibrant social media presence, business continuity measures, data security standards compliance, and a proven payment solution all work together to protect you, your customers, your investors, and third-party partners.
While risk is part of running a business, knowing that you’re following the recommend business practices to protect your company and customers from credit card fraud allows you to confidently reduce the risk level. Gone are the days of consumer concerns for using credit cards, Internet banking, PayPal, and other CNP transactions. Unfortunately, this new “confidence” level brings with it complacency and many potential new avenues for fraudsters and hackers.
Don’t let the complacency that many consumers have with the new ways of buying and selling trickle into your business practices. At the end of the day, it’s your company’s reputation that can and will be impacted. Your customers want to buy your products and services wherever they are and however they can. Make sure you’re providing them a secure platform that is a proven payment processing solution that protects everyone involved.

Bank Chargebacks: To Represent, or Not to Represent
There is nothing simple about chargeback reason codes. Each credit card company has their own list of chargeback reason codes, and along with these different lists come different time limits, definitions, and expected merchant actions. To complicate matters, the major credit card companies (Visa, MasterCard, Discover, and American Express) don’t even use the same number-coding system to describe the reason codes.
So, yes, it’s understandable that you’d be confused. To be honest, it can be a challenge for many in the payments industry to fully understand the ins-and-outs of chargeback reason codes. The best way to really understand this key aspect of the chargeback process is to stick to the basics and the must-know information. You can spend days reading about chargeback reason codes, but this may only make you more confused. We’re going to explain what you really need to know and provide you with some links for further reading and details on reason codes.
Understanding Chargeback Reason Codes
The chargeback reason code should clearly explain why the chargeback has been filed. From reading the chargeback reason code description, you should be able to understand the issue or problem the customer had and why the transaction is being disputed.
Each reason code is composed of a two-, four-, or three-digit number and a short phrase that describes the chargeback (these elements will vary, depending on the credit card company). For example, here are reason codes from each major credit card company:

  • Visa: Reason Code 30 Services not provided or merchandise not received.
  • MasterCard: Reason Code 4859 Services not rendered.
  • Discover: Reason Code 4755 Non-receipts of goods or services.
  • American Express: Reason Code C08 Goods or services not received or partially received.

In this example, we have four distinct reason codes for the same scenario: the customer didn’t receive the purchased items or services. This example highlights why it’s important for you to be familiar with chargeback reason codes, but also why you can’t expect yourself or your team to know every facet of reason codes. There simply is too much information to manage, particularly for your team who may not be chargeback specialists. That is why solutions such as Order Insight™ are so popular; they take the guesswork and confusion out of the entire chargeback process and take the pressure of understanding chargeback reason codes off your shoulders.
However, we do recommend that you have the chargeback reason code documentation easily accessible so that if you are dealing with a chargeback and aren’t using a solution, such as Order Insight or Intelligence Suite, you can quickly find the code, understand what it means, find out the time limit for the chargeback, and learn what evidence you must provide to dispute the chargeback. To help you out, here is the documentation you need:

You’ll notice when reviewing these PDFs that each credit card company doesn’t have the same number of reason codes. This difference in the number of reason codes is so because each group’s issues differ, or they may not have a reason code for a particular scenario.
Chargeback Reason Code Categories
While there are 151 distinct reason codes among the four major credit card companies, these reason codes can be generally grouped into five main categories. No one will expect you to know all 151 reason codes, but it does help to understand the five different categories.
Familiarity with these reason code categories will help you to determine how you can improve your sales process, authorization systems, and customer interaction, thereby reducing the number of chargebacks you receive.

  • Fraud or No Authorization This category applies when real fraud has occurred and the customer’s card has been violated, or when the customer does not remember authorizing the transaction and doesn’t believe their card was compromised. For example, the customer doesn’t recognize the transaction, or the cardholder was charged multiple times for the transaction.
  • Cancel Recurring Billing This happens with subscription services, such as newspapers or magazines, and the customer is disputing a renewal. For example, a customer cancelled the subscription but was still charged, or the customer didn’t know they were agreeing to a recurring charge.
  • Products or Services This category applies to claims related to the quality of the merchandise or service. For example, the customer claims the product doesn’t match the description, or the product arrived damaged.
  • Liability Shift This category handles any claims that involve non-chip credit cards.
  • Other This broad category represents disputes that don’t fall into the above categories. For example, there isn’t an existing reason code for the cardholder’s dispute, or the cardholder is disputing the exchange rate for an international transaction.

You’ll notice from these reason code categories that there are steps you can take to mitigate the number of chargebacks you receive. Examples include: always make sure your refund/return policy is clearly stated on your website; make sure your customer service team keeps detailed records of every communication with a customer; always keep proof of authorization and transaction receipts; and make sure you are complying with the latest industry rules and regulations.
And, yes, chargeback reason codes are still complicated. We hope we’ve shed some light on this complicated area and that you have a better understanding of these codes and what they mean for your business practices. As always, the Verifi team of experts is available to answer questions and to help you protect your business from unnecessary lost revenue.

Bank Chargebacks: To Represent, or Not to Represent
As a merchant, you’re bound by a long range of rules and regulations that enable you to accept and process credit and debit card payments. The credit card companies you work with have very detailed and established rules and processes that you must be familiar with. In this article, we dig into Visa’s chargeback rules and highlight some of the key areas that you should be aware of.
The Visa Chargeback
Each credit card company and bank has its own definition for a chargeback, slightly different from others. Visa clearly states early in its guide, titled Chargeback Management Guidelines for Visa Merchants, that a chargeback “provides an issuer with a way to return a disputed transaction.”
As you know, there are many reasons for a chargeback, and Visa highlights three key reasons for chargebacks:

  • Merchant did not get authorization for the transaction
  • Merchant did not collect a card imprint for electronic or manual sales
  • Merchant accepted an expired credit card

As part of being a Visa merchant, it would be helpful for you to have a quick refresher on the Visa chargeback dispute process. We recommend that you review this process in detail in your Visa documentation, and if you have any questions, do contact Visa.
1. The customer contacts their card issuer to dispute the transaction.
2. The issuer asks the customer to provide details on the transaction, and this data is sent to the acquirer using VisaNet.
3. The acquirer next can decide to resolve the chargeback or to forward the information to you, the merchant.
4. If you are notified of the chargeback, you can choose to accept or dispute the chargeback. If you decide to dispute the chargeback, you must provide details to the acquirer to defend the transaction.
5. The acquirer reviews your information and decides how to proceed. Depending on the decisions made by you and your acquirer, the chargeback may be represented or closed.
Refunds, Returns, and Cancellations
As a merchant, you know that you must have clearly defined refund, return, and cancellation rules available to your customers. Typically, customers will dispute a transaction due to confusion over your refund, return, and cancellation rules––this can be both an honest misunderstanding or an instance of chargeback fraud. To protect and defend yourself in these chargeback claims, you need to be able to clearly demonstrate that your policies are easily accessible to all customers, for both card-not-present and card-present transactions.
To reiterate the importance of making these policies available throughout the transaction, Visa states in its merchant guide: “Visa will support your policies, provided they are clearly disclosed to cardholders.”
For card-present merchants, Visa supports the communication of your policies when you do the following:

  • Clearly detailed policy The policy is clearly printed on the front of the credit card transaction receipt close to the signature field or is in an obvious location on the receipt.
  • Signature or initials When displayed on the back of the receipt or on another document, there must be space for the cardholder’s signature or initials.

For card-not-present merchants, Visa expects you to do the following to clearly communicate your return, refund, and cancellation policies:

  • Communicate clearly For phone orders, you must email, mail, or text the policy to the cardholder and receive proof of acknowledgement of this information.
  • Clearly documented during the transaction For Internet sales, your policies must be displayed during the final stages of the online transaction or on the checkout screen. In both instances, there must be a way to validate that the customer has read or reviewed your policies, either with an accept or submit button.

Transaction Receipt Best Practices
During the chargeback process, your acquirer will likely expect you to provide a copy of the Visa transaction receipt. This receipt with the information disclosed on it is reviewed by your acquirer when determining to accept the chargeback or to represent. As part of its chargeback rules, Visa has detailed, annotated images in Chargeback Management Guidelines for Visa Merchants of the Visa requirements for transaction receipts. We recommend you review these images and compare your transaction receipts to them.
Whenever there is any doubt or question over the validity of the cardholder’s chargeback claim, your acquirer will want a copy of the transaction receipt. Visa recommends that you do the following to minimize copy requests:

  • Customer can recognize your name Make sure your customers can clearly recognize your company name on their Visa statement.
  • Informed sales staff Ensure your sales personnel understand and follow the Visa best practices for transactions. This includes providing the cardholder a copy of their signed receipt.
  • Avoid illegible receipts Your transaction receipts must be easy to read and clearly printed. Make sure your point-of-sale hardware is up to date and well maintained.
  • Copy request ratio Visa recommends that you track the number of transaction receipt requests you receive. If this ratio to your sales reaches 0.5 per cent, Visa wants you to review and improve your procedures.

Working with Visa
There is much more to working with Visa and complying with Visa chargeback rules than what can be covered in just one article. We recommend that you read the merchant guide and stay up to date with any notices you receive from Visa.
The Chargeback Management Guidelines for Visa Merchants is a very detailed guide, and we want to make sure you pay close attention to the following areas:

  • Monitoring This section details Visa’s three chargeback monitoring programs.
  • Reason Codes This section details every aspect of the Visa chargeback reason codes. (Note, every credit card company has its own list of chargeback reason codes.)
  • Compelling Evidence This section details the evidence requirements and your rights as a merchant.

Ultimately, we want you to know that working with Visa is not an onerous relationship. The more you know, the easier it will be and the more likely you’ll be to reduce your Visa chargebacks. To learn more about working with Visa, read and review the content in our Knowledge Base.

Credit Card Chargebacks - What You Need to Know
Back in your college days, the excitement over running your own business was intoxicating––you have a chance to do make a difference and see your idea in action. You learned that if you come up with an idea, create a business plan, get some cash together, set some milestone dates—then you can get working and get your business up and running. In reality, most of what you learned in college doesn’t reconcile with the hard facts of the business world, and it certainly skipped a few vital details about running and maintaining a successful business.
For example, what are chargebacks? Did your business instructor break the bad news to you about this in college? Most likely, you first learned about it when you received a chargeback notification from one of your customer’s issuing banks. It may not be a pleasant welcome to the world of business, but it is the reality. Without any foreknowledge of this common business pitfall, it’s no wonder why so many merchants end up in the eleventh hour scrambling and responding ineffectively to chargebacks.
What Are Chargebacks?
Maybe you’ve received notification from an issuer about a chargeback, or you’ve been browsing our website and realized that you have a lot of questions about chargebacks. Not to worry, we’re here to help you out.
Chargebacks were set up by the U.S. Fair Billing Credit Act of 1974 to protect consumers from credit card fraud. The thinking was that this would give customers peace of mind when using their credit cards, instilling confidence that if their card were stolen or defrauded then they would not be held accountable for subsequent charges.
You receive notification of a chargeback after your customer contacts their credit card company to dispute a charge. The credit card company responds by reversing the charge and returning the funds you received for the payment to the customer. You are now on the losing end.
The pressure is now on you to prove that the charge on the customer’s card is in fact valid, and that the customer approved the charge. To do this properly, you need to provide solid proof that the customer initiated and authorized the charge.
Responding to Chargebacks
Stated bluntly, responding to chargebacks is not easy. When done incorrectly, this process can be expensive, exhausting of resources, and ineffective. (Something you didn’t learn in Business 101…)
To respond to chargebacks effectively, you need to understand the reasons why a customer may file a chargeback:

  • Confusion over the charge on the credit card statement. This is incredibly common and can be prevented by providing detailed billing descriptors about the substance of the transaction. For example, provide information about how and when the item was ordered, or even a more detailed description of the item, such as size or color.
  • Fraudulent charge due to credit card theft. The customer’s card was stolen and violated. Typically, the credit card company will identify this before the customer even finds out about the charge. This is the prime reason why chargebacks were first introduced.
  • The item was not received. Now with online and mobile sales, often items are simply dropped off at the customer’s address without a signature of receipt. This can result in the item being stolen or even left at the wrong address. It is best if you ensure that your delivery service requires a signature upon receipt of the item, as well as making sure that your authorization system prompts the customer to double-check and approve their delivery address.
  • The customer was charged multiple times for the order. This can simply be chalked up to human error. Often the charge wasn’t processed correctly the first time so it was run again, and then due to a communication error the customer was charged twice for the item.
  • A subscription was canceled but the charge continued. This can happen when the customer is not fully aware of the subscription cancellation policy and believes they have followed the guidelines, when in fact they haven’t. To prevent this from happening, make sure you have clearly documented your subscription cancellation policy as well as your refund/return policy on your website.
  • “Friendly” fraud or chargeback fraud. The customer is willingly stealing from you. Unfortunately, this is a very common reason for chargebacks. People are looking for ways to cheat the system, and one way they will do this is by knowingly committing chargeback fraud. This is such a prevalent problem for merchants and issuers that we urge you to learn more about “friendly” fraud.

There is one common thread that connects these chargeback reasons: knowledge. When you have the information that you need to determine the chargeback validity, you can then decide how to respond. Often the best response is to contact the customer directly, but to do this you need a solution in place such as CDRN, which allows you to quickly and easily contact your customer. If you do determine that the chargeback is valid, then you can take measures to ensure that it doesn’t happen again. This can be readily handled by setting up a solution to help you stop chargebacks before they happen.
We know you’re doing your best to run your business. We know that it can be challenging to deal with the unexpected. We don’t want chargebacks to be unexpected. The best thing you can do (and what they probably didn’t tell you in Business 101) is to take steps today to prevent chargebacks from happening tomorrow. Get the knowledge you need so you’re not left scrambling and stressing over chargebacks.

Credit Card Chargebacks - What You Need to Know
You’ve been alerted to a customer chargeback, and you know that this is a fraudulent claim. So, what do you do? You can do nothing and silently stew and simmer with anger and frustration. Or you can take action and decide to represent the credit card dispute.
Fighting chargebacks and disputing these fraudulent claims is your right as a merchant. You have the right to represent yourself and prove that the customer is making a fraudulent claim and abusing the chargeback process. The problem is that so many merchants wrongly believe that this is a wasted effort that is guaranteed not to succeed.
Well, here’s the honest truth: you need to know that you can dispute these chargebacks. This is the only way your voice can be heard, by speaking up and fighting for your rights when you’ve been wrongly charged and are now a victim of chargebacks. Just as chargebacks were created to protect customers, you need to use the chargeback dispute process to protect yourself.
Now is the time take action. But first, you need to be fully prepared and ready to win the dispute. This means you need to know what to do, what not to do, and how to judge when you should actually walk away from the representment process.
Ready, Set, Take Action
As part of your initial preparation to respond to the chargeback, it’s important to know how not to get caught up in the common mistakes that many merchants make during chargeback representment. These are some common mistakes you should learn to avoid:

  • Assuming that issuers don’t want you to represent: In fact, the opposite is true. From an issuer’s perspective, they want people to know that credit cards are secure. Public perception is that credit card theft and fraud is running rampant, hence the frequent default position behind why so many people file fraudulent chargeback claims. If you stand up and fight these invalid credit card disputes and charges, you’re helping to show that credit cards are secure and safe. To do this effectively, you need to legitimately know which claims are valid and which are not. This is not something you can guess at, rather you need a solution such as our Intelligence Suite, which allows you to get the best balance of fraud protection for your business.
  • Ignoring the chargeback reason codes: These reason codes are key in effectively winning a dispute. The reason code determines the information you need to provide when filing a representment. Are you up-to-date on the latest reason codes from each issuer (yes, each issuer has their own reason codes)? Do you know the evidence requirements for each code? Do you know all the rules and regulations surrounding the representment process? Not knowing these details can and will hurt your ability to win a dispute.
  • Giving up too early: This dispute process is not simple, and we don’t want you to give up when you begin to feel overwhelmed. There are resource, money, and time requirements, but these should not be a barrier. The long-term rewards are worth this preemptive effort and investment. You’ll reduce the chance of a customer making a second fraudulent chargeback claim, you’ll encourage issuers to be more diligent about analyzing customer claims, and you’ll inevitably reduce the instances of chargeback claims.
  • Neglecting your customer service team: Your customer service team is critical in preventing chargeback claims. When customers know that they can quickly and effectively resolve their concerns with your customer service team, they’re less likely to become frustrated and file a credit card dispute, now and in the future. Equally, you need to make sure that your customer service team is keeping thorough records of every customer interaction. This includes keeping emails, recording or documenting conversations, and ensuring they have evidence of the efforts made to resolve the customer concerns. When you have easy access to this information, you can make a strong representment case.
  • Trying to do it alone: Chargebacks are complicated, winning a dispute is complicated, and this is why you can’t always do this alone. Too many merchants get motivated to take action, but they often overlook that they lack the expertise needed to successfully represent a chargeback. Working with a representment partner allows you to focus on your business, so you can be at ease with the knowledge that the real chargeback experts are working for you to win the credit card dispute. This all adds up to less time spent, money saved, less stress, improved customer confidence, and higher win and success rates.

Ready to Represent
We frequently work with merchants who have unknowingly made these mistakes and are left wondering why they didn’t win their dispute.
We urge you not to succumb to making these common mistakes and accepting a mere “Honorable Mention” in your business achievement. We want you to be motivated to represent and win the business “Blue Ribbon.” And we want you to do it when you’re ready. We understand these challenges, and this is why we’re here to help you. We urge you to learn more about the common mistakes that merchants make during the dispute process, and know that we are on your side. The more merchants like you who take action and successfully win credit card disputes, the better it is for everyone involved––customers, business owners, issuers, investors, and everyone who plays a part in the whole payments ecosystem.

Credit Card Chargebacks - What You Need to Know
Speak up and let people know what it is that is impacting your ability to be and do your best. A bold statement for sure, but one that many of us would benefit from heeding. To get ahead, you need to take some risks and speak up when you have new ideas or don’t agree with your colleagues. This is particularly important when looking at how you do business. Just because you’ve always done it one way, doesn’t mean it is the best way.
Think, for example, of how you do or don’t communicate with your issuers. If you’re like most merchants, there isn’t a clear line of open communication with your issuers. In fact, you may only communicate when discussing the painful aspects of doing business, specifically when reviewing your chargeback fees.
Reduce and Eliminate Chargeback Fees
Each chargeback you receive comes with an additional cost––the chargeback fee. This fee is levied against you regardless of the outcome of the chargeback process. Win or lose, you’re charged a fee by your issuer. This fee is designed to help cover the costs the issuer incurs when dealing with customer chargebacks.
The more chargebacks you receive, the higher your chargeback fees; and when your chargeback ratio is too high, your ability to do business with issuers becomes prohibitive.
One of the best ways you can protect your business and eliminate the costs of chargeback fees is to speak up and open the lines of communication with your issuer and customers. Typically, the chargeback process follows these lengthy steps:

  1. The customer contacts the issuer to dispute a credit card charge.
  2. The issuer refunds the money and contacts the merchant.
  3. The merchant can choose to dispute or accept the chargeback.
  4. The merchant is charged a chargeback fee by the issuer, regardless of the outcome of the chargeback.

With the standard chargeback process, you are contacted too late in the process. By the time you’ve been contacted and alerted of the chargeback, the issuer has already spent time and money dealing with the customer and the chargeback. This translates into issuing the chargeback fee and other penalties.
Now, imagine if you were alerted to the chargeback at the same time as the issuer. This chargeback process now looks something like this:

  1. The customer contacts the issuer to dispute a credit card charge. The merchant is automatically contacted.
  2. The merchant communicates openly with the customer.
  3. The chargeback is resolved between the customer and merchant.

As you can see, with this updated chargeback process, the issuer is not actively involved. Now, you’re communicating directly with your customers. When you’re able to communicate directly with your customers, it’s much easier for you to solve the problems that customers are facing, ultimately preventing the chargeback from occurring.
The Customer’s Perspective
Fraud aside, customers often contact their issuer because they’re confused about a charge on their credit card. Now, with hacking, credit card theft, and identify theft in the news, customers are on high alert for unauthorized transactions.
By communicating directly with your customers for when they are concerned about a credit card charge, you’re able to assuage their concerns and learn how to better improve your billing. Often, taking the small step of improving the descriptors and details included with the charge can eliminate customer concern and confusion.
This all adds up to reduced chargebacks and ultimately the reduction of chargeback fees. One small change in how you communicate with your customers and issuers can have huge payoffs for everyone involved.
Your customers are happy to have their concerns dealt with quickly and easily. Issuers are relieved to no longer be directly involved in the traditional lengthy and costly chargeback process. You eliminate the time and costs of dealing with chargebacks, keep your customers happy, and eliminate chargebacks and chargeback fees.
All this comes from speaking up and changing the chargeback process. Be actively involved in changing how customers, merchants, and issuers communicate and work together. Remember, the traditional process is not always the best process.

A monthly forum of  compiled insight from top leading industry thought leaders to help you protect your payments and boost your profits

Question of the Month

What do merchants need to know to get their share of millennial’s mobile wallets?

Welcome to the August edition of the Verifi newsletter. This month, we’ll look at the millennial consumer and what merchants need to know to get their mobile wallet-share of this very influential buying group.
Millennial consumers control roughly $200 billion of purchasing power, according to a Barkley study. They don’t just control their own wallets; they influence their parents’ and grandparents’ purchasing decisions to the tune of $500 billion.
This generation is bigger than the Baby Boomer generation and not to be ignored. If a merchant is not actively playing by the millennium rules of engagement, they stand to lose out on big profits.  Happy reading!

MILLENNIAL CONSUMERS – ARE YOU GETTING YOUR FAIR SHARE?VerifiImage5

Millennial consumers want it now and they want it their way. It is all about instant gratification on their terms. They are techno wizards – who consume while they socialize – and collaborate and share while they consume. Merchants who understand this, and intersect seamlessly into the millennial buying process will win. To make sure you are getting your fair share, check out our latest White Paper: The Millennial Consumer: What Every Merchant Should Know About This Influential Buying Generation Download Now

BEACONS, BIOMETRICS AND BIG DATAVerifiImage2

Have you harnessed the power of the Internet of Things? We’ve compiled insight from industry leaders on how merchants can best collect, protect and analyze data within the context of IoT. Read More

GET DIGI WITH IT – THE CONVERGENCE OF DIGITAL AND PHYSICAL COMMERCEVerifiImage3

The growth of digital commerce is staggering, but its brick-and-mortar counterpart is still vital in the overall commerce mix. Shoppers look up reviews and prices while wandering the aisles of retail stores. Merchants need to understand how to take advantage of this digital-meets-physical convergence of commerce. Read More

MOBILE COMMERCE PREDICTIONS FOR 2016 AND BEYONDVerifiImage4

Exactly how big is this mobile commerce thing going to get?  Check out mobile commerce growth predictions for 2016 and beyond. Read More

UPCOMING TRADESHOWS

Verifi will be attending the following tradeshows. Will you be attending? Contact info@verifi.com and meet with us.
9/8-9/9: Finnovate Fall 2016
9/12-9/14: Ecommerce Paris
9/13-9/15: ERA
9/26-9/29: MasterCard Europe Risk Conference – Split, Croatia

PARTING WORDS

Payments are moving faster than ever. Millennials continue to shape the payments landscape, causing merchants and banks alike to forge ahead into (often unknown) emerging technologies and digital payments. Additionally, expert outlooks point toward contextual payments, which will feed into the Internet of Things…making it easier than ever for motivated consumers to buy on the spot. While the payments universe seems to be expanding exponentially and at increasing speed, merchants always need to bear in mind that fraudsters are out there lurking, ready to take advantage of these new technologies – and holes in protection – to steal profits. As technologies revolutionizes payments, merchants need to ensure they’re paying as much attention to security and fraud prevention as to the next new shiny technology to ensure that their customers – and their bottom line – is protected.
Ask us how our Cardholder Dispute Resolution Network (CDRN ™) can help prevent and STOP chargebacks before they happen as well as provide a feedback loop to inform your front-end fraud control tools. Since chargebacks cannot be completely avoided, our Chargeback Revenue Recovery service provides representment expertise so you don’t leave money on the table. We’ll help you decide when to fight and when to walk away, so you can focus on what’s most important – running your business successfully.
Don’t forget…you can now download our updated ebook: What Every Card Not Present Merchant Should Know: Navigating Today’s Challenging Payment Ecosystem? Get it now!
What are your thoughts? Ping us on Twitter (@verifi) with #paymentstips and let us know what you think.