Official 2020 Chargeback FAQ
They don’t teach you about chargebacks in school, but understanding the rules, causes, and consequences of chargebacks can have huge implications for the health and profitability of an ecommerce business. Myths and misconceptions about chargebacks abound, and it doesn’t help matters at all that the landscape of the card payments industry is under constant change.
In 2020 we're making it a priority to answer every merchants burning questions about chargebacks: how to fight them, how to prevent them and how to use the data my chargebacks generate to enhance my business?
Where chargebacks are concerned, these are the most commonly asked questions on the internet.
*Please note "Can I go to jail for chargebacks?" is one of the most frequently asked questions. If that isn't clear indication the average consumer understands "Friendly Fraud" to be wrong, I don't know what is.
What is the definition of a chargeback?
How does a chargeback work?
What is a chargeback fee?
Can you go to jail for chargebacks?
Why did I get a chargeback?
- Never received the product ordered
- Received a damaged or defective product
- Payment card was used without permission
- Transaction not recognized
How can I fight chargebacks effectively?
- Timing matters. The more quickly you can respond to a chargeback, the better your chances.
- Be proactive. By monitoring your customer and purchase activity, you can see patterns emerging in terms of product returns, sales numbers, and issuer charges. This can help you identify transactions that have a higher likelihood of turning into chargebacks, and you can document and preserve evidence accordingly.
- Know the facts about chargebacks. Don’t waste time fighting chargebacks you can’t win. Don’t submit extraneous evidence that won’t help your case. The bank employees who review representments aren’t going to spend hours playing detective over your claims—your argument against the chargeback must be concise, specific, and backed by the right evidence.
- Know your reason codes. Each chargeback notification will come to you with a reason code attached. These codes tell you exactly what type of chargeback you’re dealing with.
- Attentive, proactive customer service can be a great way to prevent chargebacks from happening in the first place—when a customer knows they can get help from the merchant when they’re dissatisfied with a purchase, they’re less likely to take the complaint straight to their bank. Additionally, emails and other customer correspondence can serve as evidence in your favor when customers engage in friendly fraud.
Hopefully this provides some grounding in the basics of chargebacks for perplexed merchants, but we know we haven’t answered all of your chargeback questions. Every chargeback tells a story, and sometimes those stories are strange and convoluted.
When you’re dealing with chargebacks that don’t fit the mold and you can’t figure out how to fight or prevent them, don’t be afraid to reach out to the experts. When you have dedicated professionals
Even merchants who have been in the ecommerce business for years sometimes get confused by new or complex chargeback scenarios. If you’ve got questions about chargebacks, you’re in good company—and we’ve got answers for you.