A chargeback, otherwise known as a payment dispute, is a claim that gets created when a customer asks their bank/card issuer to reverse a charge.
Chargebacks are an effective tool for cardholders to dispute any transaction that they are unhappy with.
The problem for merchants, however, is when fraudulent cardholders attempt to dispute legitimate transactions in order to get you to return funds to them.
Some reasons for chargebacks:
The cardholder does not recognise the transaction
Duplication of a transaction/payment
Processing error
Goods or services not delivered
Defective goods
Refund not processed
Fraudulent use of the card
How to protect your business from wrongful chargebacks
Here are some tips and tricks to help you stay safe:
Ensure that you have invoices or any record of purchase from any cardholders.
Ensure that if you're delivering an item, you have proof of delivery (preferably signed).
If you're performing a service, ensure that you have a signed acknowledgment that the work has been performed or the service has been completed.
Save any communication with the cardholder in the event a chargeback may occur (it’s also good business practice).
What's Yoco's chargeback process?
Here's how it works:
When a chargeback is raised by a cardholder, Yoco’s acquiring bank (the bank that receives all of Yoco’s merchant payments) will inform us of these chargebacks and the reason.
We'll then contact you via email with the details of the claim, and request info related to the chargeback claim.
You have 3 working days to provide us with the required documentation to resolve the chargeback claim.
We then submit the supporting documentation to our acquiring bank.
If the bank decides that the information you've provided is adequate, the chargeback can be won in your favour. However, if the information provided is not adequate, or you don't provide what was requested, we'll have to accept the chargeback.
If the chargeback is accepted, you'll be liable for the value of the chargeback claim.