Resolving Chargebacks Best Practices for Merchants

Chargebacks can significantly impact your business. Understanding and effectively managing disputes with Processors (Elavon, TSYS, FISERV) can help protect your revenue. This guide outlines the chargeback resolution process, industry-specific best practices, and clear guidelines for both card-present (CP) and card-not-present (CNP) scenarios. This information ensures merchants and staff are aligned in their response to chargebacks. 

What is a Chargeback?

A chargeback occurs when a customer disputes a charge, resulting in a reversal of funds. Common reasons include: 

• Unauthorized charges
• Items not delivered
• Incorrect or defective items
• Processing errors
• Fraudulent activity

Processor Chargeback Resolution Process

Step 1: Receive Notification

Processor (Elavon, TSYS, FISERV) notifies you via email or through your merchant portal. Act promptly.

Step 2: Review the Chargeback Details

Immediately review:

• Chargeback reason.
• Transaction date and amount.
• Customer information.
• Deadline for response.

Step 3: Gather Necessary Documentation

Provide clear and comprehensive evidence:

• Signed receipts, invoices, or contracts.
• Proof of delivery (tracking numbers, confirmation signatures).
• Communication records (email, text. calls).
• Authorization records.

Step 4: Submit Your Response

Upload evidence through Processor portal or as instructed. Response typically required within 7-14 days.

Step 5: Decision and Follow Up Your Response

Processor (Elavon, TSYS, FISERV) reviews submissions within 30-45 days. Successful evidence submission can reverse the chargeback. Unsuccessful submissions may require further action or appeal.

Best Practices by Industry

Dental Practices

• Clearly communicate payment policies and insurance responsibilities.
• Obtain signed consent and clear patient acknowledgment of service charges.
• Keep detailed patient treatment and billing records. 

Manufacturing Businesses

• Provide clear product descriptions, delivery timelines, and return policies.
• Maintain accurate shipping and delivery documentation.
• Ensure signed delivery confirmations.

Plastic Surgeries and Healthcare

• Maintain thorough consent forms detailing procedures and costs.
• Clearly document consultations, procedures, and post-procedures communications.
• Capture before and after photos, where applicable and consented to by the patient.

Home Improvements & Lumber Merchants

• Ensure itemized, detailed receipts or contracts with clearly stated terms.
• Maintain signed proof-of-delivery receipts for large orders.
• Confirm orders through written communication before shipment.

Best Practices for Card-Present (CP) Transactions

• Always obtain an authorized signature or PIN verification.
• Verify cardholder identity and ensure cards are properly inserted or swiped.
• Maintain clear CCTV footage, if applicable.

Best Practices for Card-Not-Present (CNP) Transactions

• Use Address Verification Service (AVS) and CVV validation.
• Clearly communicate shipping and billing policies at checkout.
• Provide electronic confirmations immediately after purchase.

When and Why to Use 3DS?

3DS adds an additional security layer to authenticate cardholders during online transactions, significantly reducing the risk of fraudulent transactions. Industries particularly vulnerable to fraud such as electronics, luxury goods, healthcare services, and high-value retail (including plastic surgery, dental, and home improvement sectors) should strongly consider implementing 3DS.

Deciding Whether to Implement 3DS

Consider implementing 3DS if:

• Your business regularly experiences fraudulent transactions.
• You handle high-value transactions.
• Your customer base is international.

How to Avoid Stolen and Fraudulent Transactions via CNP

• Implement 3DS authentication.
• Use fraud detection tools and services.
• Verify customer details through AVS and CVV checks.
• Monitor transaction patterns and flag unusual activities.
• Maintain clear transaction descriptors.

FAQs for Chargeback Management

Q1: What if I fail to respond on time?

Failure to respond results in an automatic chargeback loss, permanently deducting the funds.

Q2: Can I appeal a lost dispute?

Yes, you can appeal with additional evidence. Confirm eligibility through your processor representative.

Q3: How can chargebacks be minimized?

• Transparent refund policies.
• Detailed transaction descriptors.
• Prompt customer communication and dispute resolutions.

Q4: Which documents are most effective?

Proof of delivery, signed receipts, and documented customer communications are strongest.

Q5: Are there chargeback fees?

Yes, Processors (Elavon, TSYS, Fiserv) typically charge a fee per incident. Review your merchant agreement for details., signed receipts, and documented customer communications are strongest.

Implement Proactive Practices

• Train staff on handling and documenting transactions clearly.
• Regularly review and update policies to prevent misunderstandings.
• Consistently monitor your merchant portal for alerts and chargeback notifications.