Covers the definition of a credit card chargeback, the most common reasons for chargebacks, and how to proactively prevent chargebacks from occurring.

1. 21 Simple Steps
to Reduce Your Risk of Chargebacks

2. It can take anywhere from 6 weeks
to 6 months to resolve a payment
dispute.
Did You Know?

3. You, the merchant, can lose out on the money
you’re owed, and face an additional chargeback
fee from the processor.
Anywhere from $15.00 to $100.00 per
chargeback!
Did You Know?

4. Even if the cardholder
complaint is proven false, and
no returned funds are owed to
the customer, you may still
face additional processing
fees!
Did You
Know?

5. If a merchant account receives too many
chargebacks, this can be a red flag to
credit card companies.
Your business could be labelled as fraudulent, which in
turn will do damage to your image and the existence of
your business.
Did You Know?

6. So, How Do
You Prevent
Chargebacks?

7. charge•back (chärj′bak′), n. is the process where
the credit card company takes the money from a
transaction from the merchant’s account and deposits it
back into a consumer’s account following a dispute.
The amount is “charged back” to you, the merchant.
First, let’s get a firm
First, What’s a Chargeback?

8. Why Does a Chargeback Occur?
The customer is disputing a transaction. A
customer files a complaint regarding a potential
fraudulent transaction on their statement.
The issuing bank then makes an investigation
into the compliant.
If the complaint is proven valid, a chargeback
occurs where the funds are returned to the
customer.

9. What Are the Most Common
Reasons for a Chargeback?
 Customers don’t recognize a charge
 A customer claims they cancelled services
 The customer claims they didn’t receive the item they
ordered
 The customer is unhappy with the service or purchase
 The customer claims it’s a fraudulent charge — a
purchase was made with a stolen card

10. As a business owner, it makes sense to
do all that is in your power to reduce your
risk of chargebacks.
What follows are 21 simple, proactive
measures to prevent chargebacks.

11. Provide receipts for every single purchase.
In today’s fast-paced world, customers are
often inattentive to the purchases they make.
A receipt serves as a good reminder and
decreases the likelihood of a chargeback.
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12. Be ultra-clear about refunds, returns and
cancellation policies.
Have the conditions of the sale written on
the receipt. For instance, if you run a fitness
club, make sure the cancellation policy is
clearly stated on all membership contacts.
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13. Include your refund, return and
cancellation policy on your
website.
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14. Have a sign near your register
at your point of sale counter
where customers can clearly
read the policies.
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15. Make sure charge descriptions are
clear. Use dynamic descriptors.
Dynamic descriptors allow a merchant to
define what appears on their customer’s
credit card statement regarding the
purchase. With dynamic descriptors, you
can include specifics like the product purchased, business
name, business location and contact information.
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Examples:
Static Descriptor:
ABC Inc. 8885551212
Dynamic Descriptor:
ABC Inc. Annual Membership
Renewal 8885551212

16. Be proactive! Let your customers know
what name will appear on their statements.
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17. Include a phone number as part of the
charge description.
Having a phone number as part of the dynamic
descriptor will allow for easy communication
and resolution should a customer no recognize
a charge on their credit card statement.
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18. Provide accurate descriptions of products and services.
Accurate product descriptions are particularly important for online
ecommerce vendors where customers often dispute transactions
because the product they received is not as it was described online.
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19. Get a signed proof of delivery for products.
Make sure you get a signed proof of delivery for
your products — especially if you're an online
ecommerce vendor that ships products regularly.
It's best to use carriers that require signatures for
delivery and also give you, the merchant/vendor,
a copy of that signature for your records.
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20. Communicate with customers about
renewals.
Ongoing communication will go a long
way to reduce chargebacks, as opposed
to a new "renewal" charge showing up on
a customer's statement and the customer
not knowing what the charge is for.
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21. Don’t charge your customer’s card
until your product has shipped.
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22. How to Prevent
In-Person Fraudulent
Transactions
(That Can Result in Chargebacks)

23. Train your employees to know
the signs of fraud and suspicious
behavior they may encounter.
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24. Ask for identification when handed
a credit card.
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25. Verify signature by comparing the
signature to the back of the card.
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26. Check the expiration date and
enter the security code on the
front or back of the card.
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27. Keep good records.
In the case where you need to fight a chargeback, keeping good
records can help you win a dispute. You want to make sure you
have the customer’s credit card transaction dates, amounts and
authorization information. Signed documentation helps greatly too.
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28. How to Prevent
Fraudulent Online
Transactions
(That Can Result in Chargebacks)

29. Confirm the phone number and
transaction information PRIOR TO
delivering a service and shipping
a product.
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30. Utilize card security code verification.
Known as CVVs (Card Verification Values —
a 3-digit number on VISA, MasterCard and
Discover and a 4-digit number on American
Express), these codes help ensure that the
person placing the online order has the actual
card in hand.
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31. 19
Use 3D Secure.
This prevention tool acts as another
layer to prevent fraudulent activity.
Cardholders are required to create
an identification number. By employing
3D Secure in your checkout process
— and therefore requiring the purchaser
enter the code at checkout — you’re ensuring that
the actual cardholder is making the purchase.

32. Become PCI compliant.
All companies that process, store or transmit
credit card information are required to comply
with the Payment Card Industry Data Security
Standard (PCI-DSS), which is a set of
requirements created to keep payment card
data secure.
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33. Share these tips with your staff.
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These tips will only be
successful if your staff shares
in understanding chargebacks
and how to implement these
best practices. Share this slide
deck with your staff today.

34. Want more tips on how
to prevent fraud and chargebacks?
Have questions on how
Constellation Payments can assist?
Call 888.244.7060
Email sales@csipay.com