Fighting a chargeback from dishonest customers is incredibly infuriating for companies and results in a loss of overall revenue and a poor reputation. To know how to win a chargeback dispute, you need to, first, understand the process of chargebacks and how they work. This requires researching the chargeback’s research code and collecting compelling evidence that will allow you to win your chargeback dispute. All winning chargeback cases also require a persuasive rebuttal letter providing an overview of all your evidence. While this may seem like a lot of information, this article will simplify and highlight how your company can fight a chargeback and win.
What is a chargeback?
A chargeback is a payment amount that is returned to a customer’s credit or debit card after they dispute a specific transaction. Many times a chargeback occurs from the result of a product return, but often, customers will attempt to receive their money back from a transaction where the product wasn’t returned. This unethical chargeback from customers results in businesses losing revenue and ruining the trust between the company and its customers.
Generally, in the cases of fraudulent customer chargebacks, financial institutions are helpful and will look into the case. With that said, the steps your company needs to take in order to win a chargeback case are critical. The next section will discuss the importance of avoiding the top mistakes made by merchants when fighting a chargeback.
Top 4 mistakes merchants make when fighting a chargeback
Fighting chargebacks are complicated and expensive, so understanding the common mistakes merchants make while fighting chargebacks is a critical step in winning the case. Here are the top 4 mistakes merchants make when fighting a chargeback:
1. Not fighting or knowing about a chargeback
Having a lack of awareness about customer chargebacks throughout your company is a huge mistake and should be brought to the attention of the accountants who manage your company’s finances.
While you shouldn’t fight every single chargeback against your company, it’s worse to do absolutely nothing about them. Doing nothing about a chargeback means that your company is guaranteed to lose the profit for that particular chargeback. Understanding the chargebacks throughout your finances will allow you to track which chargebacks are worth fighting and which are not.
2. Not maintaining a high level of customer service
With a high level of customer service and good communication, businesses can clearly communicate with their customers to solve any problems customers have with a purchase. If the issue is solved there, there may be no need for a chargeback to occur in the first place.
Merchants with a lack of customer service skills will often run into chargebacks that could’ve been avoided if there was a higher level of communication within the transaction. Customers are quicker to conduct a chargeback when there is nobody to contact about an issue the customer has.
To avoid this issue, merchants should clearly highlight their customer service contact information on their website along with having many methods of communication for customers.
3. Fully understanding chargeback reason codes
The reason code identifies the type of chargeback, the reason the chargeback has been requested by the customer, and defines the necessary steps needed for the merchant if they wish to dispute the customer’s claim. Understanding the reason codes associated with the particular chargeback claim is crucial towards preparing an effective chargeback case against the customer.
Failing to understand the reason codes will result in a failed dispute by the merchant and will result in a lost profit for your company.
4. Wasting effort on certain chargebacks
Similar to not fighting or knowing about a chargeback, not understanding the complexities of chargebacks and putting too much effort into difficult chargeback cases will result in a waste of time and resources. It’s better to save the resources spent on…