Fighting Chargebacks with Delivery Confirmation

Table of Contents

1. What Is Delivery Confirmation?
2. What Are the Different Types of Delivery Confirmation?
3. Why Is Delivery Confirmation Important for Chargebacks?
4. How Does Delivery Confirmation Fit Into a Chargeback Defense Strategy?
5. Using Delivery Confirmation to Counter False Fraud Claims

One of the downsides of doing business online is having to ship purchases across the country or even across the globe to get them to the customer. And no matter how many precautions you take, you can never be 100% sure that the customer will receive their purchase. Items can be damaged, lost, or stolen right off the customer's front step.

Unfortunately, some customers take advantage of this situation to lie and claim they never received their purchase in order to get a chargeback from their bank. In these situations, delivery confirmation can be a powerful defense.

Illegitimate chargebacks are often referred to as friendly fraud, and merchants who aren't in the habit of investigating their chargebacks might be surprised by how common this truly is.

When merchants receive illegitimate chargebacks, regardless of the reason behind them, they should fight those chargebacks through representment.

Failing to do so not only results in a loss of revenue, but also makes a merchant a more attractive target for bad actors looking to take advantage of the system.

For many illegitimate chargebacks, one of the most valuable pieces of evidence a merchant can have is delivery confirmation. Let's talk about why delivery confirmation matters, what types are available, and how it should fit into a merchant's overall chargeback strategy.

Delivery confirmation can be used to make sure an expensive package isn't left at the customer's doorstep by ensuring they either sign for it directly or pick it up from the nearest office later. It can also be used to reverse many chargebacks that result from false claims about missing or fraudulent orders.

The most rudimentary forms of delivery confirmation show that the package was delivered, but not necessarily where or to whom. Rerouting can occur or the wrong person can pick up the package, but as far as the tracking information is concerned, the delivery has been completed.

Many carriers will offer additional information along with delivery confirmation, such as confirmation of the address the package was delivered to, a description of where it was left, such as in the mailbox or at the front door, or a photo of the package at its destination.

In terms of presenting compelling evidence against a chargeback, the most reliable form of delivery confirmation involves obtaining a signature from the recipient upon delivery. Signature confirmation can be an effective deterrent against friendly fraud, since it provides more substantive evidence that a package was delivered to the cardholder.

On the other hand, it's not without its downsides. If they're not home when delivery is attempted, customers can often be annoyed by having to wait another day for their package or head to the nearest office to pick it up. In addition, there are frequent complaints about delivery drivers leaving a delivery notice on the door without even attempting to actually deliver the package. However, most of the time customers will blame the delivery service for these issues rather than the merchant, so future business may not be affected.

"Merchandise not received” is a chargeback reason common to all the major networks, and it sees a lot of use. It does serve an important purpose: There are plenty of fraudsters out there who will pose as legitimate merchants online, take money for orders, and never ship a single product. Unfortunately, it’s also an easy reason code to exploit for friendly fraud.

Having documentation of delivery confirmation can help you during representment by giving evidence that you fulfilled your end of the bargain. Even better, if you're enrolled in a system like Order Insight that sends additional information to banks when a customer disputes a charge, you can often avoid a chargeback altogether. 

Delivery confirmation would seem to be rock-solid evidence against this sort of chargeback, but the term can mean many different things depending on the level of service you’re getting from your carrier. The confirmation methods themselves also vary in their effectiveness when it comes to chargeback representment.

How Does Delivery Confirmation Fit Into a Chargeback Defense Strategy?

“Merchandise not received” is a difficult chargeback reason to disprove, and under the card networks’ chargeback rules, the merchant bears the burden proof.

Basic delivery confirmation would appear to be sufficient evidence that the merchant shipped and delivered the package, but determined fraudsters have ways to undermine it. They may make false claims in explanation of why the confirmation isn't legitimate and in some cases may interfere with the tracking process by requesting address changes or entering incorrect information.

The bank still has to make a subjective decision based on the evidence before them, and there’s no guarantee that they will find a delivery confirmation compelling.

That’s why the more information you can include with delivery confirmation, the better. Photos, signatures, and detailed tracking information will make a stronger case that the merchant made every effort to deliver the package to the correct address and recipient.

The flip side of this is that customers don’t always want stricter delivery procedures, and may specifically request to opt out of them. Many people simply aren’t home during the hours when they typically receive a package delivery, and don’t want to have to chase it down at a pickup location because they weren’t home to sign for it. Some merchants may not be able to require signatures if their customers prioritize convenience and have the option to shop elsewhere.

Merchants who sell digital goods shouldn’t feel left out of this conversation — you have delivery confirmation options too, although you have to get a little more creative about it. You can require customers to communicate with you to obtain an activation key, obtain a digital signature, or log and match the IP addresses of the purchaser and the end user, just to list a few ideas.

Using Delivery Confirmation to Counter False Fraud Claims

While delivery confirmation is most commonly associated with fighting “merchandise not received” chargebacks, it can also serve as valuable evidence when defending against chargebacks tied to false claims of fraud.

Cardholders sometimes dispute legitimate purchases by claiming they never authorized the transaction or that their card was used without their consent. In these cases, delivery confirmation can help demonstrate that the cardholder was, in fact, the recipient of the goods.

One of the key factors issuers consider in fraud-related disputes is whether the merchant can prove a connection between the cardholder and the transaction. Delivery confirmation, especially when it includes a signature, can establish that the disputed transaction resulted in goods being delivered to the cardholder’s verified address.

Conclusion

Delivery confirmation is a valuable resource for merchants looking to protect themselves against illegitimate chargebacks. Whether the dispute stems from claims of non-receipt or false allegations of fraud, detailed delivery records can provide the evidence needed to refute these claims and recover lost revenue.

However, delivery confirmation works best when it is part of a larger, well-documented chargeback defense strategy. Merchants should pair delivery records with other supporting documentation—such as invoices, order details, and communication logs—to build a comprehensive case.

By proactively adopting these methods and understanding how to apply them effectively in disputes, merchants can strengthen their position in the chargeback process. While no method can completely eliminate the risk of chargebacks, using delivery confirmation wisely can reduce exposure to fraud and increase the likelihood of successful representment outcomes.