How can I avoid chargebacks?

You can avoid chargebacks by using the following best practices:

Do:

• Obtain the cardholder’s signature to confirm they received the merchandise in good condition
• Be careful when manually keying an account number for approval to prevent keying errors
• Obtain another form of payment if you receive a “Decline” response
• Confirm you received valid authorization before processing all transactions
• Confirm all your employees understand your authorization processing procedures, including voice authorization requirements
• Ensure your merchant descriptor matches the name of your business, and displays correctly on the cardholder’s statement
• Implement internal fraud prevention policies and procedures for suspicious activity
• Issue credits to cardholders as needed and in a timely manner
• Process all transactions in the proper currency, as stated on the transaction receipt
• Properly disclose your refund policy for returned or canceled merchandise to the cardholder at the time of the transaction
• Make sure your transaction receipts show the correct currency
• Check the cardholder’s card has not expired when they present it for the transaction by visually checking the card.
• Make a note on your rebuttal if you do not receive merchandise from a cardholder, who claims they have returned merchandise for being defective or not as described

Do not:

• Use credit cards to recover funds from previous chargebacks, bad checks, or any other incidents where a financial loss occurs
• “Fish” for authorization by lowering the amount or altering any of the transaction elements
• “Key Enter” or call to obtain a “Voice Authorization” after you receive a “Decline” response
• Make any adjustments to the transaction documentation after the transaction, without consulting the cardholder and obtaining their agreement for any modifications
• Batch out transactions multiple times
• Continue to bill the cardholder’s account after you receive a chargeback
• Force sale a transaction after you receive a “Decline” response
• Process a transaction more than seven days after you receive a voice authorization
• Split a transaction into separate smaller amounts to receive authorization, after you receive a “Decline” response.

Additional actions for different merchant types

As well as these best practices, different merchant types can follow additional best practices to avoid chargebacks. For more information about actions for each merchant type, visit:

• Keyed-Entry or MOTO merchants
• E-Commerce merchants
• Retail merchants
• Recurring billing or service-based merchants