What are chargebacks?
Chargebacks are refunds that are required to be made by the credit card issuer after a charge is disputed by the cardholder. These actions are a last resort after the cardholder files a dispute with the issuer. As a general rule, chargebacks cannot be issued when the charge is made in connection with a sale.
Section 2: How can I avoid chargebacks?
To avoid chargebacks, you should follow the following steps:
If the charge is accepted, verify the transaction on your bank or credit card statement to ensure you did not pay for something that you did not purchase. Contact your credit card issuer and explain the details of the transaction to them to rectify the situation and the situation should be resolved quickly.
How do chargebacks work?
Even though people are in a position to stop charges being made against their credit card and bank account, they often don’t. Inevitably, the victim is then offered a “chargeback”. This is where the card or bank that has authorised a transaction decides that it should be reversed, usually because the transaction doesn’t reflect what was purchased.
Fraudsters will often prey on this delay, attempting to convince the victim that their account has been compromised and requesting a chargeback to “protect” their accounts.
If you’ve made a purchase on a credit or debit card, and are then targeted by fraudsters who may want to reverse that payment, never agree to them.
The reasons for chargebacks
These can range from consumers having difficulty with customer service for a large number of reasons like language barriers, poor internet connection, slow response time, not being able to resolve the matter, geographical challenges, lack of an emergency number, lack of credibility on the service, inability to reach the service, lack of price comparison tools or low priority for the company. Chargebacks are experienced by people across the world. Customers are usually happy to be refunded as long as they are able to get their money back as per their own budget.
Typically chargeback recovery rates are low
Due to lack of trust, customer awareness and inadequate or a poor customer service by the merchants or the service providers, the chargeback recovery rates are low.
The types of chargebacks
Chargebacks can be defined as the effect of a transaction that causes a negative change in a customer’s ability to make a payment on his or her account.
Those fees that they will get, if they pay within the validity of the order, are known as ‘chargeback fees’.
Backup fees are charged by online stores that may occur if customers buy something online and return it within 30 days for a different product, by sending the returned items or by accepting a higher item’s value.
Websites that have these types of fees are known as credit card processors. If your are the victim of a chargeback, you will be informed about the dispute, usually over a phone call or you may get a notification by mail.
How to avoid a chargeback
Pay attention to the terms and conditions
Pay attention to the terms and conditions (T&Cs) which accompany any online purchase, and the terms and conditions that accompany any online service, and before making any payment, ensure that you read the T&Cs thoroughly.
Make sure that you understand them completely and don’t accidentally sign away your rights to your funds. It is essential to understand what you are agreeing to by signing up to any online service, and to make sure that you understand their T&Cs fully before you make a payment. If the T&C is not clear or you are not satisfied with it, do not proceed to make payment.
With eCommerce applications nowadays, it has become incredibly easy for scammers to replicate the features, functionalities, and workflows of some of the top websites and apps used today. It is very important for eCommerce website owners to implement some of the best practices to ensure that their customers remain safe online, especially when it comes to sensitive personal information like credit cards.
Smart techniques like account-based authentication and multi-factor authentication can ensure that the individuals accessing your eCommerce websites do not have any chance of being compromised.