A chargeback is a Charge the merchant for a transaction that has already been paid for. This happens when the issuing bank or cardholder questions the operation for any reason. Let’s discuss the best ways to avoid or manage chargebacks.
All shops that sell with a card may have chargebacks at some point. Many traders do not know what is involved and therefore have never claimed any. Entrepreneur’s finances can seem like a complex subject, but devoting time and attention to it is necessary to avoid losses.
To prevent this we will explain What are chargebacks, when do they occur and what to do to avoid losing money?.
What are chargebacks?
Chargebacks (or “chargebacks“, in English) are debits from the merchant for a transaction that has already been paid for. This happens because for some reason the operation was questioned by the issuing bank or the cardholder.
In other words, a chargeback occurs when Money is charged to the merchant because the transaction was disputed or unknown by the bank or the cardholder. This will result in the person requesting a refund of the amount.
What are the reasons for the chargeback?
There are several reasons why the cardholder or the issuing bank may object to a charge. Let’s see what are the reasons why an operation is questioned. The buyer may file a chargeback claim because:
- unsatisfied: The reason may be that you did not receive the product, you received it in bad condition, it was not what you expected or because you received the wrong product.
- didn’t recognize the stamp on the bank statement.
- were made multiple charges for the same purchase.
- card stolen and an unauthorized person made the purchase.
Example: Juan has a store called “Carteras Juan” and Ana made a $2,500 purchase using a card. At the end of the month the card summary arrives at Ana’s father and he sees a $2500 spend in “Los Perez SA”.
He consults his daughter and she tells him that she doesn’t know anything about this store, that she didn’t buy there. Then Ana’s father doesn’t know about the purchase, i.e. he generates a chargeback without knowing that this was the company name of “Carteras Juan”.
Can trading avoid losing the transaction money?
Yes, the merchant can make a claim in time so as not to lose the money. You must provide all documentation to confirm that the transaction has been carried out correctly.
Because of this, it’s important for businesses to be aware of the chargebacks that have been generated since then You have 30 days from receipt of the statement to make a claim. If the complaint is not made on time, the money from the sale is lost.
Tips to avoid chargebacks
Before we move on to managing chargebacks, we’re going to provide some recommendations to avoid them in the first place. While there is no guarantee that your business will never have one, there are ways to lessen your chances.
- Complete your company information. As we saw in the example, with your company’s complete data, the customer is more likely to see it and then quickly spot the operation on their card.
- Send proof of purchase. After each transaction, we recommend that you resend proof of payment so that the buyer remembers the payment they made.
- Return suspicious payments. Many payment management platforms have systems in place that detect irregular behavior and contact the company to report it. In this case, it is recommended to cancel the purchase.
How to make a claim to avoid a chargeback
If the chargeback has been made, there are ways to handle this situation. to Solve the chargeback and don’t lose the moneyHere are a few tips to keep in mind:
1. Always keep all proof of purchase
When the sale is offline, Keep the coupon signed by the customer and request the ID document to verify that you really are the cardholder.
We recommend that you keep these in a tidy manner so that you can find them again quickly in the event of damage. For example, many stores keep all of the coupons for the day in a dated envelope.
2. Check the statement of each card daily
To be informed in the event of a chargeback and to be able to solve it in good time. Checking this every day can be tedious, but it can save the trader a lot of money.
3. File the claim to avoid losing money
Therefore You must find the coupon or proof of the transaction in question and send it in with a letter of claim to the paying body.
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