Low Risk and Standard Accounts
High-Risk Accounts
Adult Merchant Accounts
High Volume Corporate Accounts
Face to Face Payments (Chip n Pin)
Home Page
Account ID:
Password:
Login Now
Web Merchant Services - Online Payment Solutions
Merchant Support
Technical Support
Company Profile
Search Website
Payment Demos


Chargebacks AKA Claw-Backs
..........................................................................................................................................................................................................................

Learn more about what they are and how to help prevent them

First of all Chargebacks can happen regardless of what you are selling or how you run your business and are pretty much inevitable. Nobody has a 100% safe business when it comes to Chargebacks and it's the legal right of every credit card holder to do one. That doesn't mean that by doing one with are being fair. People will either deliberately Chargeback as they are pulling a fiddle, cannot remember what they purchased or cannot be bothered to ask for a refund.

As previously stated it is not possible for you to avoid Chargebacks completely, however, the information in this section could help you reduce the number of Chargebacks you may receive.

What is a Chargeback?

If a merchant cannot fulfil its obligations to its customers via product delivery, replacement or refund, or alternatively a card has been used fraudulently, the genuine cardholder is likely to return to their card issuer to begin a Chargeback of any amounts paid in advance of product/service delivery and fulfilment or to dispute unrecognised transactions that have appeared on their statement.

In the normal course of business, Chargeback’s are passed from the issuer (who credit their card customers account) to the acquirer (who is debited by the issuer), who in turn would return to the merchant to either gather sufficient information to defend and unwind the Chargeback claim, or to recover monies paid in Chargeback’s. Unfortunately, if in the meantime the merchant has gone out of business the Chargeback’s are unlikely to be defendable and we (or the Acquiring bank) will stand the loss.

This is why we implement rolling reserves and deferred settlements, to essentially mitigate this exposure.

Transaction authorisation does not prevent Chargebacks

Authorisation of a transaction does not guarantee payment; it will only check the availability of funds at the time of the transaction and that the card has not been reported lost or stolen at the time of authorisation.

Chargeback Process

Please find below information on the basic Chargeback process:

  1. One of your custoemrs has a problem with a transaction on your website.
  2. The custoemr informs their card issuer of the problem, and asks for their money back
  3. The card issuer does some research to see if the shopper's demand is reasonable
  4. If the customer seems to have a case, the card issuer makes a provisional payment to the shopper
  5. The card issuer starts the chargeback process, and obtains funds from the acquiring bank
  6. The acquiring bank sends a 'Notification of Chargeback' and a 'Request for Information' to you
  7. You receive an e-mail that is the Request for Information (RFI).
  8. If you ignore the RFI the chargeback automatically proceeds unchallenged and the money is gone
  9. If you reply to the RFI we forward any information you can give about the transaction to the card issuer
  10. The card issuer looks at the information you have given and follows the rules associated with the card
  11. The card issuer decides if the information you provide satisfies their criteria.

If your information does satisfy the criteria. You are paid for the transaction after a certain period of time

If you fail to satisfy the criteria, or arrives too late, the chargeback is automatically valid and the bank pays the card issuer from your account. We then charge you an admin fee for processing the chargeback.

Common reasons why a Chargeback may occur

  • Processing errors
  • Duplicate processing
  • Incorrect account numbers
  • Claims of non service or merchandise not arriving
  • Claims of non cancellation of recurring payments
  • Merchandise or service not as described
  • Defective merchandise

Customer Service

One way to reduce the number of Chargebacks is to provide good customer service and have a high quality of goods/services offered, as this will reduce the number of cardholders raising disputed transactions with their card issuer. For further information about providing high standards of customer service within your online store refer to:

Fraud Prevention

Fraud Prevention plays an important role in the reduction of the number of Chargebacks you receive. Here is a number of fraud prevention facilities and procedures listed below:


   
     
Web-Merchant Services Limited. Registration No. 03919014 © 1997-2012. All Rights Reserved
SimplyPayments™ and Web-Merchant Services (including all other trading arms) are fully compliant with the Payment Card Industry Data Security Standard (PCI DSS)