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How to Fight a Chargeback

If a chargeback has made its way into your system, as a merchant you have five to seven days to get back to the merchant account servicer. At all costs, you need to have this done. As a busy merchant, you may think it a most inconvenient thing to happen, but it is also your responsibility to answer to this. By avoiding it, you set yourself up for the loss of your merchant account.

Let’s start at the beginning

A customer has requested a chargeback. The first thing you need to do is verify that indeed, that customer made a purchase from you, on the date specified. Look for a sales record with their signature and acceptance of your product or service.

Next, contact them and ask very nice questions. Start with what happened and then move onto other questions. Find out if it was just a double charge on the account, or if they think someone charged using their number. If you have a signature in front of you, you will find out immediately if you are dealing with something fraudulent. If none of these pan out, you just need to follow the simple rules. So, let’s assume for the sake of this example, that a product was ordered, they signed for it, and you have the signature in your files.

You contact the merchant servicer right away and you turn them in for fraud. Or, you remind them that they were indeed the person to buy the product. That’s when you find out if they were dissatisfied and how you can help to make things better.

At all cost

Avoiding a chargeback will help keep your merchant account in good standing. Too many chargebacks will cause your account to be taken away and you will lose the ability to process anything. Not to mention that the merchant servicer will take money from your escrow account and you will get charged at least a 2% fee per one hundred chargeback transactions.

It costs

Whether this was a mistake, a processing error, a fraudulent dispute or an authorization issue, it will be up to you to track down the problem. You set yourself up for loss of a transaction fee and the related merchandise income if you do not.


Not only should you have documentation of the purchase, but you should take the time to write down everything that arises as you take care of the credit card chargeback issue. The more documentation you have, the better. When you are all finished, and the customer is hopefully happy with the resolution, make certain that you follow up with the card to verify that all is well and taken care of. As well as the terms and decisions that you and customer agreed upon.

It’s not rocket science

It may feel like it will never go away, but if you take the bull by the horns and make a note to finish it with all the documentation, most times these are things that can be taken care of relatively easy. The more attention you give them, the less likely it will come around and bite you on the behind.

Keep in mind that chargeback rules change all the time and you will need to make a mental note to check in now and again to stay on top of them. Good luck!

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