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| Q: |
What is a chargeback? |
| A:
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When a credit card transaction
is disputed (either at the request of the Cardholder or by a
Card Issuer), the dispute is handled through a chargeback. A
chargeback will cause the amount of the original sale and a
chargeback fee to be deducted from the checking account you
provided in the online application. |
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| Q: |
What is a retrieval
request? |
| A:
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A retrieval request occurs
when your customer requests more information about a transaction
that appears on his or her credit card statement. |
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| Q: |
How does a retrieval
request occur? |
| A:
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A customer contacts his or her
credit card issuer to initiate the request. |
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| Q: |
Are any funds deducted from
my bank account as a result of a retrieval request? |
| A: |
No, a retrieval request is
just a request for information. The amount of a retrieval
request is not deducted from your bank account. |
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| Q: |
What are some of the
reasons for chargebacks? |
| A:
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Some of the reasons for
chargebacks include:
- Merchandise is damaged in
transit and arrives broken
- A Cardholder returns the
merchandise but has not received a refund
- A Cardholder disputes a
transaction as a fraudulent use of their card.
- Fraud screening
- Fraud management
- Merchant acceptance
- Support services
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| Q: |
What should I do if I
receive a chargeback? |
| A:
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If you receive a chargeback,
read the chargeback carefully and see if you are able to provide
the requested information. For example, for a "credit not
issued" chargeback, the Cardholder is stating they are entitled
to a refund, but have not received one. In this case, if you
receive a "credit not issued" chargeback but have already sent a
refund check to the customer, you can provide a copy of the
front and back of the cancelled check. |
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| Q: |
How do I manage
chargebacks? |
| A:
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To ensure safe receipt of
merchandise, use a form of shipping that provides proof of
delivery. For higher ticket items, require a signature for
delivery. If a buyer contacts you with a complaint about a
purchase, work with that buyer to resolve the dispute. If you
can't resolve the dispute to their satisfaction, instruct the
buyer how to return the merchandise and what form of shipping
they should use. Once the merchandise has been returned to you,
issue a credit to the same credit card used to make the
purchase. Pay attention to the Address Verification System (AVS)
response received. Don't accept numbers and information that
don't match and use common sense in shipping to an address other
than the buyer's billing address. International purchases
involve a higher risk, in part because address verification is
only available for U.S. transactions. Here are some terms you
should become familiar with and some simple tips you can use to
manage chargebacks.
Some common terms include:
- Chargeback
The return of a sale that has previously been charged to an
Issuer and subsequently to its Cardholder.
- Re-presentment
The re-submission by an Acquirer of a previously charged back
sale in an attempt to re-charge the Cardholder. Chargebacks
usually require some form of additional documentation
confirming the validity of the charge and disputing the
chargeback reason.
- Proof of delivery
A delivery receipt signed by the cardholder or a carrier's
confirmation that the merchandise was delivered to the correct
address.
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| Q: |
How does a chargeback take
place? |
| A:
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A chargeback begins when a
buyer contacts their bank to dispute a transaction. The
chargeback is passed through the credit card networks to the
merchant. Your account will be charged at the time the
chargeback is received. When the merchant receives the
chargeback it will include a "respond by" date. As the credit
card associations only allow a limited amount of time to respond
to a chargeback, it is critical any response be provided by this
date.
In some cases, chargebacks can
be "re-presented"; in other words, information can be presented
back to the Cardholder's bank disputing the chargeback. Below
are the most common scenarios where re-presentment is feasible.
The ultimate decision of whether or not to accept the
re-presentment rests with the cardholder's bank. Potential
re-presentments:
- If the chargeback reason is
"non-receipt of merchandise" and proof of delivery is
available, the chargeback can be re-presented with a copy of
the delivery confirmation.
- If the chargeback reason is
"credit not processed" and the customer has already received a
refund, the chargeback can be re-presented along with a copy
of the cancelled check or the credit card refund information.
- If the chargeback reason is
"fraud," and proof of delivery to the buyer's billing address
is available, the chargeback can be re-presented with a copy
of the proof of delivery.
- If the chargeback reason is
quality related, (e.g., "not as described" or "defective
merchandise,") and the merchant has not received the
merchandise back, the chargeback can be represented with the
statement that the merchandise has not been returned.
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