Handle Chargebacks Effectively

Every business owner knows that the choice of payment processing software is a complicated and responsible task that requires a lot of time and efforts. All the pros and cons of the payment processing platform should be carefully analyzed. But there are some other difficulties which you might be facing even when this task is completed. Chargebacks are one of the brightest examples.

Chargeback is the dispute between a cardholder and a merchant over a certain transaction when the cardholder thinks that the money was charged illegitimately or by mistake. Chargeback handling lifecycle can differ depending on the credit card association, but still, some general phases can be pointed out.

Chargeback lifecycle starts when a cardholder contacts a bank and inquires about some definite transaction; then, the bank issues a retrieval request to the merchant. A merchant has to provide the customer with information on the processed payment. If the cardholder is not satisfied with the answer, the chargeback is issued (money is automatically transferred to the customer’s account).

A merchant can dispute the chargeback and provides the acquirer with the required supporting documentation (this phase is often called the representment). In case when the acquirer decides that the information is sufficient the money is given back to the merchant. But the cardholder can suggest the second disputing round if he/she does not agree with the results of the representment (different associations have a different amount of chargeback disputing rounds allowed). When the merchant and the cardholder cannot agree, the arbitration takes place. The decision is made by the association and cannot be disputed further.

You will probably agree that a lot depends on the payment processing software. Still, at the same time, there are a lot of other phenomena that you need to be aware of to build your payment processing strategy effectively. Visit Paylosophy Blog to learn more about chargebacks.  Also a selection of useful articles can be found at #UniPayGateway.