What are chargeback’s and retrievals and why do they happen?

There are different reasons for why a chargeback is issued, but they are always initiated by the card issuer who has inquired or disputed a credit card transaction. If the transaction breached the rules and regulations set by Visa, MasterCard, Amex or Discovery, the amount of the transaction may be charged back to your checking account and the documentation will be sent to you.

Here are some reasons why a chargeback may occur:

  • The customer is not satisfied with the service rendered or the product received and they want their money back. Other times the customer just doesn’t remember where/when the charge was made (cardholder dispute)
  • The merchant made an error….maybe the credit card was expired
  • The cardholder’s account was charged more than once for an item
  • A card imprint or cardholder signature is missing
  • An unauthorized user used the customer’s credit card or online account
  • A credit is never posted to the cardholder’s account after a merchant has agreed to credit a transaction
  • A request for a ticket copy is received but the merchant does not respond

Tips for preventing retrieval from turning into a chargeback

The more credit cards a merchant processes, the more likely that merchant will have to handle a chargeback. Here are some tips that can help you minimize chargeback’s:

  • Always reply promptly and in writing to a retrieval request and keep your receipts
  • Authorization must be for the exact amount processed to the card
  • When supplying information for retrieval request make sure to include a clear and legible receipt or invoice. After allowing Payment Systems two business days to process your response, be sure to call and get a confirmation number
  • Be sure to include the expiration date on the card
  • Include a contact name and phone number in case additional information is needed
  • Do not alter a sales draft
  • Be sure to compare the cardholder’s signature to the signature on the back of the card.
  • Print your return policy on the credit card sales draft that will be signed by the cardholders. Visa & MasterCard require this printed return policy to be in close physical proximity to the signature line.
  • Do not “split” charges in order to lower the amount of the transaction.