What is a chargeback?
A “chargeback” is a dispute usually originated by a customer or the customer’s credit card issuing bank and subsequently debited to the merchant’s deposit account. A chargeback to the merchant may occur when a cardholder does not recognize the transaction or disputes the following: Participation in the transaction or sale; performance and/or quality of the merchandise or services; delivery of the merchandise and/or services; breach of any term, condition, representation, and warranty of the transaction; amount of the charge.
Up until recently after the ‘Clear Copy Request’ process, if the cardholder still says it wasn’t them and the merchant has no proof of delivery or authorization in writing, then Visa, MasterCard and American Express will chargeback the dollar amount of the transaction to the merchant. Under the Merchant Agreements with Visa/MasterCard /Amex they do not guarantee non-face to face credit card transactions, even though the original transaction was approved. They would only guarantee the transaction if the merchant saw the card and has a signature from a receipt. These were the rules but ResAvenue would fight for the merchant in these cases and despite the fact all internet transactions are non-face to face, the banks are willing to review each on a case by case basis. However with the introduction of the latest 3 D Secure Protocol this risk of chargeback due to “Transaction Not Authorised” has been eliminated. ResAvenue has already implemented “Verified by Visa” the new online security fe
After the ‘Clear Copy Request’ process, if the cardholder still says it wasn’t them and the merchant has no proof of delivery or authorization in writing, then Visa, MasterCard and American Express will chargeback the dollar amount of the transaction to the merchant. Under the Merchant Accounts Agreements with MasterCard/Amex they do not guarantee non-face to face credit card transactions, even though the original transaction was approved. They only guarantee the transaction if the merchant sees the card and has a signature from a receipt. These are the rules but Instabill fights for the merchant in these cases and despite the fact all internet transactions are non-face to face, the banks are willing to review each on a case by case basis. We have been able to successfully reverse chargeback’s based on various information we were able to capture about the consumer, from our Risk Management system and the merchant.
A chargeback is a fee which is often imposed upon merchants who have taken money through a transaction involving a credit card where the owner of the card claims that the transaction was not authorised by them. For example, they may claim that their card was lost or stolen, or that the card details were simply used by someone else without permission. When someone makes such a claim then their card company will investigate. If the company decide in favour of the claim, then a chargeback is usually imposed on the merchant (who is usually an innocent victim of whoever it was who used the card without permission). The chargeback is not the value of the disputed transaction (which would be debited from you anyway), it is an additional fee. Most card companies pass the costs of efraud on to their merchants through chargebacks. However, PayPal have a system (subject to conditions) which protects you from having to pay these extra fees. If you make sure that as a merchant you handle all transa
