Unnecessary Chargebacks and Processing Costs

In order to minimize losses, eCommerce merchants need an adequate chargeback tracking system, procedures in place to avoid unnecessary chargebacks, and a thorough understanding of their representment rights. The following best practices should be applied:

• Do not complete transactions where authorization has been declined. Authorization requests should not be repeated after the first one has been declined, an alternative form of payment should be requested instead.
  
• Credits should be promptly issued, where applicable. In particular:
  
  • When cardholders contact merchants to directly resolve a dispute, the credit should be issued in a timely manner to avoid unnecessary disputes and the associated chargeback processing costs.
    
  • Email messages should be sent to cardholders informing them immediately of the impending credit.
    
• Provide sufficient information to transaction copy requests.*
  
  • The response to a copy request should include full information about the transaction, including the following details:
    
    • Account number.
      
    • Card expiration date.
      
    • Cardholder name.
      
    • Transaction date.
      
    • Transaction amount.
      
    • Authorization code.
      
    • Merchant name.
      
    • Merchant online address.
      
    • General description of product and services.
      
    • The shipping address, if applicable.
      
    • Address Verification Service (AVS) response code, if applicable.
      
  • Provide the following optional additional data to help resolve inquiries and reduce chargebacks:
    
    • Transaction time.
      
    • Customer email address.
      
    • Customer telephone number.
      
    • Customer billing address.
      
    • Detailed description of products and services.
      
    • Whether a receipt signature was obtained upon delivery of goods or services.
      
• Respond to transaction copy receipts in a timely manner.
  
  • Design and implement a timely, efficient process for fulfilling transaction copy requests.
    
  • Investigate fax fulfillment by the acquiring bank, if this is appropriate for the provided products or services.
    

*Card issuers may charge a transaction back if a sales receipt copy is not received within 30 days of a request to the acquiring bank. A prompt fulfillment of the request will help avoid such chargebacks and their associated costs.