Advice on processing - chargebacks

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SteveBtm

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Mar 4, 2010
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Hey guys... So just wanted to see if anyone could offer advice on handling chargebacks with processing..

I've launched a new product (non-rebill) and it's showing promise... this month we've had about 600 transactions... today we received 10 chargeback notifications, all from one customer.

This would obviously put us over the 1% or 1.5% or whatever it is if it were the end of the month.

Does anyone have experience with how you handle things like this? Is this something that could actually kill a merchant account if we go over? Any advice would be huge!
 


They wont freeze your MID. talk to your bank/processor call the customer resolve the issue be a good merchant and youll process forever.
 
Some merchant processors are quick to put a hold on your cash. They don't care and in many cases it damn nears kills your business (I have felt it personally starting out). So... if you don't have a contact with the customer, I would say call your processor and just refund them. Depends on what your selling etc but sounds like lower price points in volume.
 
if the buyer used amex you might be able to avoid the cb and issue a refund. you can contest chargebacks and take other actions with your gateway and/or bank to try and deal with problem accounts. good luck.
 
Essociate said:
if the buyer used amex you might be able to avoid the cb and issue a refund. you can contest chargebacks and take other actions with your gateway and/or bank to try and deal with problem accounts. good luck.
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So, would you say it's advised to issue a refund after the chargeback?

I respond to all chargebacks, typically they have been for valid charges and which case we've won most. In this case, if I issue a refund, then file the response stating a refund has been issued - what does that do to the chargeback?

This happens to be for Visa also.
 
you should check with the head of your gateway and/or bank; however in our case we issue refunds whenever possible if the transaction was for a virtual good. if you have a physical product and signature etc. then contest.
 
Essociate said:
you should check with the head of your gateway and/or bank; however in our case we issue refunds whenever possible if the transaction was for a virtual good. if you have a physical product and signature etc. then contest.
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Just spoke with merchant services and they said not to refund... said there is no point since the funds are already taken out, it'll just be taken out double and won't effect the chargeback itself - meaning it's still there.
 
SteveBtm said:
So, would you say it's advised to issue a refund after the chargeback?

I respond to all chargebacks, typically they have been for valid charges and which case we've won most. In this case, if I issue a refund, then file the response stating a refund has been issued - what does that do to the chargeback?

This happens to be for Visa also.
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Don't issue a refund! I don't know about your merchant but mine takes the money out of my checking account immediately once a chargeback is filed. Refunding them gives the customer twice the money back.

Also, even if you win the chargeback, you still have a minus point (or whatever it's called) against your overall record. Seeing how it's coming from the same customer, try to get in touch with them and resolve it. Otherwise, just present all the paperwork in your defense.

Maybe I'm wrong but I doubt this will blow up your merchant account. I'm sure it's not the first time a customer has gone apeshit on a business and filed multiple chargebacks at once.
 
Chargeback on a straight buy? Probably fraud. You using anything to protect against fraud?
Depends on who your accnt is with but the most lenient guidelines are below:
Visa- below 100/month or below 1% if you're over 100.
MC- below 50 per MID/month which is easy to load balance with a few MIDs.
 
jd60131 is on the mark and makes this answer simple. If you only have 10 chargebacks don't worry about it. You either need to stay under 100 total CB's with Visa for the month or 1%.

You should always contest the chargebacks. You should also contact the customer to prevent any further issues.

This does sound like fraud so be sure you put some process in place for blocking fraudulent orders.

As long as you stick with the straight buy you should never have an issue. Always good to have a back up account just in case something crazy does happen to shut down your processing.
 
jd60131 said:
Chargeback on a straight buy? Probably fraud. You using anything to protect against fraud?
Depends on who your accnt is with but the most lenient guidelines are below:
Visa- below 100/month or below 1% if you're over 100.
MC- below 50 per MID/month which is easy to load balance with a few MIDs.
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Right on, was just informed by my processor that percentage becomes applicable when reaching 100/m and 50/m (mc).. so we're good on that front.

Have CVV2/AVS (zip only) verification in place currently... going to be doing verified by visa and mc secure code verification for subsequent purchases which I think will help a lot toward multiple chargebacks on same card.
 
SteveBtm said:
Right on, was just informed by my processor that percentage becomes applicable when reaching 100/m and 50/m (mc).. so we're good on that front.

Have CVV2/AVS (zip only) verification in place currently... going to be doing verified by visa and mc secure code verification for subsequent purchases which I think will help a lot toward multiple chargebacks on same card.
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you should also be doing address checks, and geoIP checks
 
SteveBtm said:
going to be doing verified by visa and mc secure code verification for subsequent purchases which I think will help a lot toward multiple chargebacks on same card.
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Does anyone have stats on Verified by Visa or MC Secure Code? Though I'm well aware of it due to this industry, none of my credit card providers have ever advertised the ability to sign up for these programs. What percentage of customers actually use these programs?
 
tvmatt said:
Does anyone have stats on Verified by Visa or MC Secure Code? Though I'm well aware of it due to this industry, none of my credit card providers have ever advertised the ability to sign up for these programs. What percentage of customers actually use these programs?
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They don't advertise it, but if you haven't already signed up to it and you come to a page that requires it, I think you're meant to set one up there and then on the page.
 
If you're asking these types of questions then you have no business processing credit cards to begin with. Take the time to learn the most important part of your business...
 
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