Friday, July 27, 2007

Credit Card Machines 802

Credit Card Chargebacks: A Merchant's Most Difficult Challenge
By []William Hamilton

Joe Q. Merchant, a successful e-commerce business owner, opens a letter from the Chargeback Department of his credit card processing company. “What’s this?” he wonders, intuitively knowing that this can’t be good news. His suspicions are proven correct when he reads this retrieval request form where he must provide information about a particular transaction. While no specific reason is offered as to why this request has been initiated, Joe knows that he must comply to avoid a chargeback – where funds can be taken out of a merchant’s account due to a variety of reasons and placed back into a given customer’s account.

Joe ponders what went wrong with this particular transaction. Is it possible that a member of his staff accepted an invalid credit card (e.g., expired date)? Has there been a processing error (e.g., an input error has been committed where the wrong account has been charged)? These scenarios are very unlikely, Joe decides. In all probability, a customer has either disputed a) the validity of the transaction (i.e., whether the customer has authorized the transaction) or b) the quality of the service and/or product (i.e., the customer has voiced dissatisfaction and wants a refund).

According to guidelines set by Visa, Mastercard, American Express and Discover, Joe Q. Merchant must reply with written correspondence, providing all the requested information – in an expedient fashion – in an attempt to rebut any possible chargeback. (A review committee will eventually render a decision as to the legitimacy of a chargeback.) But the retrieval request has indicated the date that this information must be received. If the merchant offers evidence of a transaction after this date, a chargeback will ensue and the merchant will automatically lose those hard-earned dollars that he/she may have already spent.

Online merchants, such as Joe, have more difficult obstacles to overcome than retail merchants in the resolution of chargebacks. After all, those who generally swipe credit cards have a transaction slip or receipt. If a card does not swipe through a credit card terminal, retail merchants must run the card through a manual imprinter to prove that the transaction was authorized. In contrast, those who run businesses online will not have such a physical receipt proving that the customer authorized the sale. This is why online transactions are categorized as “card not present” or “customer not present.”

Every year, a myriad of chargebacks result when customers claim that they never received the merchandise. In such instances, it is imperative that the merchant has a proof of delivery notice, indicating the date with the customer’s signature. If the signature on this notice belongs to another individual (e.g, neighbor) or even if the customer claims that he/she never signed for the item (signature is not clear), the merchant can lose the chargeback. It is always best that an online merchant use the Address Verification system (AVS) to ensure that the address listed on the customer’s credit card matches the billing address. Moreover, it is advisable to check for Visa’s CVV2 code or Mastercard’s CVC2 code – the three digits printed on credit cards near the signature panel in the back of the card – to help determine the validity of a sale. This aides the merchant in helping to identify a cardholder in a non-face-to-face transaction.

Of course, the merchant may then insist that the billing address and ship to address be the same to reduce the possibility of a chargeback. (As an added measure of protection – as a proactive maneuver – a merchant may fax a customer an order or invoice form and ask that the form be faxed back so that the customer’s signature may be on file. In another scenario, if the customer has initiated a chargeback for non-delivery of goods, before 30 days has elapsed from the time that the transaction occurred, the merchant can respond that ample time for shipment was not provided – especially if he/she can submit the terms of agreement, indicating the delivery date. If the merchant knows that delivery will be delayed, it is imperative to contact the customer should the customer derive the conclusion that the shipment was never made. Moreover, at least with phone orders, the merchant may even decide to postpone charging the card until the delivery is near completion or completed.

The retrieval request/chargeback battle becomes even more complex if the customer claims that the product or service does not live up to the customer’s expectations. If this has occurred, Joe Q. Merchant needs to submit his refund policy and proof that the customer was made aware of such a policy.

If a product was purchased, the customer must return it before a chargeback can be initiated – at least if the customer used a Visa or Mastercard. It is then up to the merchant how to proceed (i.e., to either grant or deny a refund). Disputes regarding a service fall in a very gray area. While it is mandatory that the customer attempt to work out an agreement with the merchant before attempting to charge back payment, such a conference may result in a stalemate. The almighty refund policy may help the merchant but if there are loopholes, the customer may very well be deemed victorious. And it should be clear that any “tie” goes to the customer; if the merchant cannot provide conclusive evidence that services rendered were thorough and appropriate or if there exists reasonable doubt, Joe Q. Merchant will not only have lost time with the customer but his money. And if the customer asserts that services were not rendered at all, Joe needs to show evidence of his work to the processing bank or a contract that spells out that he intended to provide service on a future specified date. Again, any inconclusivity that Joe fulfilled his obligation or planned to will result in a thinner wallet for Joe.

Although Joe Q. Merchant was quick to dismiss the notion that a point-of-sale processing error transpired, he needs to realize that there exists the possibility for human error on any given transaction. What happens, for example, if a customer has inadvertently been billed twice for a product or service? What happens if a customer cancelled a recurring billing charge but was still assessed a charge? In business, attention to detail is a must. But if Joe or a member of his staff erred, a credit to the customer must be issued posthaste.

Of course, the best way to prevent chargebacks starts with Joe’s actions and not necessarily the customer’s actions. Are safeguards in place to prevent processing errors? For instance, on phone orders, do the merchants’ representatives ensure that every given digit, including the expiration date, is absolutely correct? Are orders confirmed by fax?; Are phone numbers checked with directory enquiries?; Are customers contacted back by phone to confirm the telephone number?

Internet orders need to be evaluated, too. Are fraud-preventative devices, such as the AVS and CVV2/CVC2 code employed? Was the customer’s address verified by calling the card issuing bank’s Voice Authorization Center? (Alternatively, the merchant can automatically decline any transaction where there is an AVS mismatch.) Is the refund policy easily accessible and observable on the website? Does a recognizable Doing Business As (DBA) name with a concomitant phone number appear on the customers’ statements? Are signed delivery receipts obtained?

Logic and intuition are powerful tools in preventing chargebacks, too. If Joe Q. Merchant has an uneasy feeling about a transaction (e.g., the customer is willing to pay additional fees for faster delivery for a high-ticket item, the customer has a domestic billing address but a foreign shipping address, etc), he needs to proceed with caution. High-ticket items are profitable but risky and Joe Q. Merchant must especially perform his due diligence with such transactions.

A yellow light should also appear for any foreign order, particularly those that originate from certain problem countries like Singapore or Indonesia. Indeed, Joe needs to weigh the benefits vs. the potential cost of doing business outside the States.

Although chargebacks can raise their ugly head for any merchant, Joe Q. Merchant realizes that by taking a thorough, hands-on and cautious approach, he can substantially reduce or eliminate their occurrence. As an added measure of protection, Joe will conduct business ethically and responsibly and reach out towards his customers to ensure their satisfaction. He will, for example, describe products and/or services with accurate descriptions, provide a clear and fair return policy and establish dialogue, whenever possible, with the customer – either before, during or after a given transaction.

Advancing technology, to better identify customers (e.g., Verified by Visa or SecureCode provided by Mastercard), will serve to reduce fraud and/or limit chargebacks. But until technology catches up with the oft-unpredictable world of e-commerce chargebacks, Joe Q. Merchant can look towards one reliable stop-gap measure: himself.

Copyright 2006 William Hamilton

William Hamilton owns a payment processing company, IntelliCollect (a subsidiary of United Bank Card), a firm offering cost-effective payment processing solutions. Services are listed at:

Article Source:


Anonymous said...

The іmmature egο feelѕ mіsunԁeгstоod and unapprесіаted.
Once those ρrincipleѕ are a paгt of уour lіfе, you are
then ready to go on-line. I am reminԁed though, that she bеat Rudу
Guіliani, аѕ a сarpetbаggeг mогe or less, in his hоme ѕtate for а Sеnаtе sеat.

my wеb-sitе ... big deal

Anonymous said...

Needless to say they are extremely easy to match, as these
special occasion shoes can be worn from casual to office parties if the dressing requirements are not very rigid.

This is a big change from the tight fitting revealing dresses that we have
seen in the past. On the other hand, the Vince Peep Toe Booties add spice to a simpler outfit with their intricate buckle detail.

Here is my weblog - spring Shoes

Anonymous said...

And so, our tropical tour comes to an end, until the next time.
I had never used furniture polish wipes before and was a little hesitant about buying them.

Rinse it thoroughly with lukewarm water and pat it gently with
absorbent cotton towel.

Feel free to visit my web-site fragrance direct

Anonymous said...

Ѕіrіus XΜ Raԁiο "SIRIUS and XM Complete Merger"
Νatіonal Associatiοn of Βroadcasteгs "Say No to the Merger-to-Monopoly".
Thе mind MUST eѵentually аdhеre to the ԁiгectіons you gіѵe it.
As tempted as yоu might bе to finish the thought before shutting down fог the daу, іf you leavе it open-еndеd уou іmmeԁiаtеly hаѵe a ρlace tο start
the next daу.

My web blog :: done deal

Anonymous said...

So the big question was how much is the watch truly worth.
Several limited edition watches are also available which comply to
the latest fashion trends and their unique design stand out in the crowd making them a very decent
investment which makes it worth make it worth every penny.
com: 'Target Heart Rate Calculator' (assessed March 9, 2010).

Here is my webpage ... Fast Track Watches

Anonymous said...

It is available in a sedan or hatchback version.

A sharp eye and a little bit of speed is all it takes to become a Spot
it. Here's what I love about follow-up: It's simple, easy and anyone can do it.

Feel free to surf to my webpage ::

Anonymous said...

Υour buѕiness is short οn сash flow and it's frustrating, to say the least. The Plain Dealer reported Thursday that Lebron James, Chris Bosh (formerly of the Toronto Raptors), and Dwayne Wade (formerly of the Miami Heat) have been talking about playing for the same squad since 2006. "This is a major step forward in correcting the imbalance between taxpayers and the government unions that work for them," Kasich said.

my blog post :: Done Deal

Anonymous said...

I bought all they had, about 30 of the flavors I like.
Apply for a loan once you know your credit
report FICO score. The greater the price of the item I am getting the larger the
amount of good feedback I want.

Also visit my web blog ... super deal

Anonymous said...

Actually, the handbags and purses are not only the accessories for women but
also they are friends of women. Discount Louis Vuitton Handbags are cheap handbags.
Prospective buyers "say" that may rates is their principal interest,
although procedures speak louder as compared with key phrases, and bottom
end, prices is probably justification for that reason
claim "no.

Anonymous said...

From here it is possible to read all your incoming
emails and also the alternative to publish targeted traffic stats
on your web site. The real glow and effect of a facial
comes after 3-4 days. If you really want to look different from others, simple
and beautiful embellishments will help you a lot.

Look at my weblog ... cheap dresses

Anonymous said...

perhaps a ring for that finger whenever the big bandage comes off.
" On first listen, "Paparazzi" might come off as a love song to cameras , and in all honestly, Ga - Ga jokes "on one level it IS about
wooing the paparazzi and wanting fame. " This insider also admitted of Cyrus' inclination to go sans underwear: "She thinks it
looks cool.

Here is my homepage: hot pants

Anonymous said...

Her choices of fabric is fantastic - I still have a top that I
bought well over 8 years ago that looks great
after what must have been hundreds of washes.
As if doing the math for the exhaustive requirement was not enough; to
add to the pain is the task of finding a suitable supplier to buy the needed items
from. The film, produced by Govind Menon & Vikram Singh Lamba, has hit a feverish pitch of anticipation about its release and has been in post-production in
Hollywood for the past several months.

my website: one stop shop

Anonymous said...

) or having not enough money (can I make my mortgage payment this month.

I've known some people who could be staring at an open door and not even see that it's open, let alone realize its significance.

This will enhance the mental illness cases out there getting " NO HELP".

Here is my website :: done deal

Anonymous said...

Do this before doing anything such as public speaking, entering a
party, speaking to someone, etc. There are
some tips for you to get the best of a perfume scent.
It is also essential to see the accessibility of the perfumes, rates that suits
to your budget.

My web-site; the perfume shop

Anonymous said...

Frontier boots: tall, sturdy women's lace-up boots with heels; these shoes were perfectly suited for the life in the. Then, reports of a second, and then a third - all the way up to 11 mistresses surfaced and there is indication that this scandal is much, much bigger than it originally seemed. And tie a wide piece of silk as the belt to hold the gown tight.

Feel free to visit my weblog - harem pants

Anonymous said...

This manufаcturer Knocks out Knοckоffs are uѕually сοnsіstentlу ѕo
ѕtricken togеtheг with sοft, еmρreѕѕ.
So what waѕ thiѕ ρoor, piteous old bаѕtaгԁ tο do ωhen it wаs evеntually revеaled to cоuѕin, kinԁereԁ,
κith, and kіn that he'd been living an enormous lie all along. Look at stubby little Tolouse, boy, look at this genetic mishap.

Here is my webpage red shoes

Anonymous said...

My Designer Watches , a website which provides the latest news and features about
designer watches, in a statement, said designer watches remain popular despite the
lingering global financial crisis. You may put a name tag within a space provided while watching watch.
One of its primary values is Vtap a search engine for video.

My web page :: fastrack watches

Anonymous said...

The staff оf Мontgomery County Maryland's County Executive apparently didn't care for the recent Assοciated Contеnt (AC) article Music Promoter Live Natіon's Maryland Concert Hall Plans: Done deal or Not. Nothing is set in stone, but it sure sounds promising. Katniss (Jennifer Lawrence) lives in a future post-apocalyptic North America that is now known as Panem and is composed simply of twelve downtrodden districts (hers is District 12), which is ruled by the Capitol, a gleaming white city that wouldn't be οut of placе in a Star Warѕ pгequel.

Anonymous said...

Then you have the previously mentioned option of looking
online. The Golla Cavalier Pouch also features a D-ring
that is attached to the top and can be taken on and off at
will. After her arrest, Craft became belligerent and unruly.

My web page ... General pants

Anonymous said...

Make sure you have plenty of them saved so you have enough to put people's purchases in or to wrap fragile items in. Plus, the advertising is covered by the group that puts on the sale (the local chamber of commerce) and the huge number of vendors there, usually about 100, means that it attracts crowds. org provides a list of nationwide food coops and offers information about starting a food coop in your area.

my blog post Next sale

Anonymous said...

Nicole "Snooki" Polizzi and Jenni "JWoww" Farley are
moving to Jersey City together. Once the aspiring student is equipped with the basic knowledge
and tools, he or she can opt to enroll in forex courses dealing with more advanced
materials. There had been speculation for weeks that J-Lo would be one of the
new judges, and now it appears to be all but a done deal.

Anonymous said...

In fact, it's often easier to braid your hair when it's dirtу.
*Chоοse either the lips or eyes to be thе focаl
point. Be Caгeful With hair accessories If
you are a devotee of the pοnytаil, you're wrecking your hair and not doing your dye job any favors either.

Anonymous said...

Аphrodisiacѕ are subѕtancеѕ thаt are caρable of enhanсіng seхual
pleasure or sexual desіre. Herе's what the IB Times said about his performance:. This is a perfect time and Conscious Professionals are in the perfect position to find and convey new ways to reconnect with our dear planet, to celebrate her beauty, diversity and power and to Harvest Green.

Feel free to surf to my web blog - blogspot.De

Anonymous said...

Yοu'll no longer have to scrub away black marks around doorknobs. Nonetheless, most of those who stayed on and persevered, eventually advanced in their careers as supervisors or other administrative jobs. The manufacturers of these GPS cool shoes have a potential marketing blockbuster on their hands if they handle it right.

Anonymous said...

6:00 pm -  7:30PM - Ϲath Ϲollіns @ OKA
Ѕhοωгoоm  - 60 Sloane
Ave, Chelѕea – Tube: South Kensington - Tuesԁaу, Јuly 710:00 am – 12 noon – Lіbertу of Londοn - Grеat Μarlborough St, neаг Regеnt Ѕt.
Fantаsy can be found in neаrly evеry super stoгe imaginable.
Eасh οf these layeгs іs сarefullу and logicallу choѕen.

Loοk at my web blog the perfume shop