Knowledge Can Save You Money
Chargebacks are the reversal of a sale or credit transaction initiated by the issuing bank. This can be due to a technicality or based upon action taken on behalf of the cardholder. Chargebacks are violations of the rules and regulations established by a payment card brand, such as Visa, MasterCard, Discover, or American Express. Chargebacks are something every merchant needs to avoid, as they can result in lost revenue, and even cost the merchant additional funds in fees. Study the information below to learn how to avoid chargebacks, or to manage them efficiently when happen.
To avoid chargebacks, it is best to train all employees the proper procedures that need to be followed at the point of sale, and to insist that such procedures are followed consistently. Listed below are proper to avoid chargebacks that should be implemented in your transaction process:
- Never under any circumstances alter a sales draft.
- Without exception, always obtain an authorization for the exact amount of the transaction processed to the card.
- If a card is declined for the full amount of the sale, never try to get an authorization by “splitting” or reducing the amount of the transaction.
- If the full amount of the sale is declined, then the card is simply declined. Request another form of payment.
- When the card will not read after being swiped, and you have to key in a transaction, always manually imprint the card and ensure the signature and all transaction information is written directly upon the imprinted draft. Be certain that the manual draft is imprinted with the merchant name and location.
- When a customer is due a credit and the original sale was made on a credit card, always process the credit back to the original card number. Never refund by check or cash. If credit is due on multiple sales, always process each credit individually.
- Always have your return policy pre-printed on the credit card sales draft and signed by the cardholder at the time of sale. Visa and MasterCard require that the refund policy must be close to the cardholder’s signature to be recognized.
- Be sure to compare the cardholder’s signature to the signature on the back of the presented card. If the signature panel is not signed, ask them to sign it in front of you. If the cardholder refuses, then you need to refuse the card and you should ask for another form of payment.
- If you receive a retrieval request, be sure to respond promptly and with valid, legible documentation. Wait for two business days to allow initial processing of your response, then place a call the automated voice system to verify that your response was received and obtain a confirmation number.
Always compare the credit card account number on an electronically printed draft to the credit card number printed upon the face of the credit card. If the numbers are different, call the Automated Voice Authorization Center and inform the operator that you have a “Code 10” authorization and that the card numbers do not match.