The coronavirus epidemic has adjusted to the essence of shopping: over the years, those who use online payments have increased several times. At the same time, the army of scammers is growing, ready to profit from someone else’s wallet. The number of phishing sites is multiplying, tens of thousands of gullible buyers fall for the bait of phishing. It turns out that money transferred to fraudsters or unscrupulous sellers of goods or services can be returned to your bank account on your own. The chargeback system, which operates on almost all payment platforms, will help in this.
What is a chargeback?
Chargeback is a universal procedure for canceling a transaction on a Visa and MasterCard card by payment systems. In other words, this is a procedure by which a customer can dispute a payment made by a bank card and then return the money. For example, this option can be used if someone purchased a product in an online store, but it did not arrive or arrived of inadequate quality, or if someone bought an online ticket but canceled the flight. Chargeback can be received from almost any organization if the buyer transfers money to a bank account of a legal entity from a card. So, it’s possible to carry out credit card dispute resolution from:
– airlines, railway companies;
– Internet shops and Internet services;
– banks, financial organizations;
– Forex brokers, casinos, binary options;
– financial pyramids and other scams;
– other organizations, provided that one paid for services or goods with a card.
What is a reverse chargeback?
Nobody likes to waste money. For retailers, the goal is to increase sales rather than decrease them through time-consuming, erratic, or malicious procedures. Therefore, a chargeback reversal occurs when the issuing bank decides to undo the chargeback and give the money to the merchant after reviewing the evidence.
How the reverse chargeback works
There are five main parties involved in the reverse chargeback process:
– the payer, who is also the holder of the bank card;
– the issuing bank, that is, the bank in which the card is opened;
– payment system: MasterCard, Visa;
– the beneficiary bank, i.e., the bank in which the account of the legal entity is opened;
– legal entity: an online store, an airline, or any other provider of services and goods.
It can be beneficial to utilize the following simple strategies in your attempt a reverse credit card charge:
1. Be mindful of bank notifications
The first step in the game of how to reverse chargebacks is to be aware of it. However, getting to that knowledge in time can be challenging. Chargeback alerts are frequently emailed or mailed to your company, and there are stringent time limits for filing a case for reversal (commonly 30-45 days). It is crucial to recognize these notifications right once and to start investigating the transaction. Regardless of how compelling your case is, the issuing bank will automatically deny late reversal applications. You cannot fight and prevail without being aware of your position in time to take action. Remember that banks follow the card network deadlines but may still have internal processes that affect timelines.
2. Watch the reason codes
It is essential to comprehend the justification for a consumer chargeback. Several factors, such as the following, may prompt a customer to initiate a chargeback:
– problems with the processing of credit cards, such as several transactions for only one purchase;
– the cardholder is unaware of the transaction;
– The service or the product does not correspond to the listing;
– defective products were delivered;
– the failure to get ordered things;
– the promised services were not provided;
– Since the seller has stopped doing business, the buyer cannot get a refund.
You could mistake valid chargebacks for problematic ones if you don’t pay close attention to the reason codes. Furthermore, there is a chance that you will submit the wrong supporting documents, which will cost you money, time, and credibility with the bank.
3. Gather Your Evidence
You must now compile all the data you have on that specific transaction in order to find proof that refutes the reason code, which the reason code provides as the justification for a chargeback. Evidence will probably be kept in many locations throughout your organization. For instance:
– Look for evidence of delivery if a customer asserts that a product wasn’t ever delivered.
– Check the customer’s transaction history if a consumer alleges they were charged more than once.
– If a consumer complains that the product doesn’t match the description, provide them with accurate and thorough product descriptions.
4. Contact the issuing bank with your case
Your chargeback reply letter is the most important part of your representation package, excluding the actual proof. You will demonstrate the supporting documentation for your chargeback dispute in this file. Remember to be brief, clean, and succinct (a smarmy or confrontational tone ruins an answer more quickly; avoid flowery language and superfluous facts). Your case will succeed or fail based on how well-written your response letter is.
5. Submit Your Response
The first person to examine your representation package and decide whether to accept it or reject it is your processor. In light of this, file your dispute as soon as you can. In order to avoid unintentional refusal, you should also carefully adhere to the submission instructions provided by your processor. Forward the file as soon as it’s possible, and make sure to set it up according to the processor’s specifications. Watch out for proper file transmission. If you deliver late, use the wrong delivery method, or supply mixed-up files, your presentation will surely be destroyed.
For each of these procedures, templates should be prepared. If you’ve already done some research, it will be less difficult for you to put together a strong chargeback dispute package. A basic chargeback reversal strategy operates similarly. We cannot overstate how important having a strategy is. Now that you’ve submitted a representation package, you may have a clearer knowledge of various procedures that may hurt your chargeback rates.