Types of Chargebacks You Should Know About

StrategyDriven Managing Your Finances Article | Entrepreneurship | Risk Management | Types of Chargebacks You Should Know AboutChargebacks have become a menace for online businesses. You risk losing a lot of money and valuable resources when you don’t pay attention to fighting chargebacks. They are transaction reversals that a buyer issues after purchasing products that did not meet the description or for other reasons. An effective way of fighting chargebacks is to understand how they occur and putting into place preventative measures. Here are some common chargeback types that your business might experience.

Chargeback Fraud

A fraud chargeback is a fraudulent request for a refund in the form of a chargeback. The cardholder disputes a transaction to regain the transactional amount and retain the services or products offered.  A chargeback fraud accounts for a significant percentage of all fraud losses. Chargeback fraud occurs when buyers try to take advantage of the chargeback process. They buy the product and try to get their money back by making false claims for the chargeback dispute. While it could be challenging to prevent chargeback frauds, winning such disputes can be equally hard. You can win the conflict by submitting a response with compelling evidence indicating that the buyer is trying to take advantage of you. Also, make sure that you collect all the necessary information from a buyer.

Merchant Error

Merchant error is among the most common chargeback types. While your employees may not intentionally commit a merchant error, its consequences can be dire. Merchant errors are caused by an array of things, including clerical mistakes and system errors. It could also be anything else that doesn’t satisfy your customer. For instance, goods not received or received in an unsatisfactory way and technical issues with your payment process, causing unauthorized errors or duplicate transactions.

Friendly Fraud

It’s an innocent act that could be costly to your business. Friendly fraud doesn’t involve malicious intentions by the cardholder. Professionals, such as Ethoca can help with the measures needed to fight friendly fraud. Some primary causes of friendly fraud include some friends or family members making unknown transactions or forgetfulness. Sometimes a simple action like an unclear product description can trigger a buyer to issue a chargeback for transactions made. An effective way of preventing friendly fraud or generally any chargeback is to tighten measures on your end.

These are some of the common causes of chargebacks. The bottom line is that you need measures to protect your business from any chargeback. Liaise with the professionals to save your reputation and money.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *