merchant chargeback protection

It seems like mobile banking is working to the advantage of consumers. Disputing credit card charges has never been so easy. And with the automation of the dispute process, consumers can now file complaints by just a few clicks. Even so, merchants still have much to worry about. Especially, following the report from Aite Group showing that all banks in the United States will process to the tune of $5.6B in Chargebacks this year—a 17% rise from 2015s charges.

This means small business owners must be prepared to fight Chargebacks. But most importantly, they ought to watch out for the most common causes of Chargebacks.  According to Chargebacks911, the obvious loopholes include;

  • Transaction not recognized by cardholder
  • Fraudulent transactions
  • Duplicate processing
  • Failure to describe service rendered or product paid for
  • Transactions not recognized by cardholder
  • Failure to process a credit.

To ensure you don’t suffer too many Chargebacks this year, here are 5 top tips any Merchant should practice this year.


Make the most of all available tech

Go for virtually all types of tech that are quick at detecting fraudulent transactions and stopping Chargebacks before they are fully processed. This way you can get in touch with the issuing bank before the acquiring bank receives a request for a chargeback.

Verify that the buyer is the actual cardholder

While it’s easy to detect a fraudulent transaction by carrying out a few checks, most merchants often ignore these procedures. Always ensure that the name on the buyer’s ID matches the one on the credit card. Such simple checks are great ways to prevent fraudulent transactions and do away with avoidable Chargebacks.

Avoid shortcuts- follow the protocols set by your account provider

Be sure to familiarise with the specific requirements and guidelines of your credit card processor.  eMerchantBroker is a good example of a processor that provides merchants with  merchant chargeback protection which also includes strict security protocols. Failure to abide by these practices may leave you susceptible to unnecessary Chargebacks.

Use a chip card reader

If you still use the traditional magnetic strip reader, then that must be the reason you are still vulnerable to fraud. Why not purchase an EMV-ready credit card reader or check with your processor to see if they have other options?  Remember, the law will most probably rule in favor of the customer keeping in mind that the liability rule shifted fraud accountability to the “least EMV-ready party.”

Keep records

Regardless of how vigilant you are, you can never stop all Chargebacks. However, in case you have to deal with any, you are better off if they are reversed. Proper documentation is one way to improve your chances of winning a chargeback dispute when responding to a customer’s claims.

Now you know all the common causes of Chargebacks and how to fight against them. However, knowledge is never useful unless put to good use. Implementing all the above strategies will help you avoid unnecessary Chargebacks and win all null Chargebacks.