How A Digital Chargeback Management System Can Streamline the Dispute Process

A Surge in Chargebacks

The COVID-19 pandemic accelerated the shift to e-commerce as businesses enacted safe, remote interaction models including curbside servicing, order ahead, and buy online pickup in store. The inability for a business to see a customer in person and run a card-present transaction on an EMV device also means that there is a higher risk for fraud and resulting chargebacks. Some chargebacks—such as duplicate transactions and processing errors—are legitimate, while others are a result of fraud or a customer dispute.

A report issued by Forter cites that COVID-19 forced many businesses to conduct their work remotely, which left them exposed to network vulnerabilities. Fraudsters take advantage of data breaches, harvest account data, and use social engineering scams to take over a card holder’s account and make purchases. Additionally, legitimate cardholders have exploited the anonymity that comes with a switch to online payments, which has resulted in an increase in friendly fraud.

Since the pandemic started, chargebacks have increased 800%.

Outdated Paper Processes

An increase in chargebacks can damage your bottom line. Not only is the transaction amount debited from your account; you may have also lost inventory, and incurred internal handling costs. A timely response to a chargeback you think is fraudulent or in error is important.

Unfortunately, official chargeback notifications are traditionally sent by postal mail or fax, making them inefficient. And with more business owners and staff working remotely since the start of the pandemic, it can be difficult to receive and respond in a timely manner.

Typically chargebacks expire 30 days from the time the customer initiated the dispute with their bank or card issuer. Quickly submitting supporting documentation that proves the transaction was valid is your best defense against costly write-offs.

A Digital Breakthrough

PayJunction has introduced an Online Chargeback Management System that makes it easier for you to be notified when a chargeback is issued, view a list of all chargebacks, research transaction history, easily access information to prepare your response, and upload supporting documentation from anywhere.

Email Notification

PayJunction will send an email notification for each chargeback received. It includes the case number and amount, indicates whether it is a credit or a debit, and provides a link to an online list of recent chargebacks. The email will include instructions on how to respond.

I do really appreciate and use the emails of the chargebacks. These notices prompt me to look up the transaction and block the card so there’s no further fraud on that card.

Chargeback Reports

Chargeback responses can now be managed from within PayJunction’s Virtual Terminal. An online Chargebacks report makes it easy to locate key information including merchant account name, Merchant ID, case number, chargeback reason code, amount, and transaction date. Users can click on the amount to search for original transaction details that can be used to make their case. Users can export the report to share with office staff in preparing a response.

Protect Your Business

It is recommended that anyone who accepts payments in your business takes the time to learn more about the dispute resolution process and the best practices that can protect your business from losses related to chargebacks.

Here’s a quick list of best practices that will help you defend your business against fraud and wrongful chargebacks:

• Make sure you have an EMV terminal to capture in-person transactions and avoid the EMV liability shift for fraud
• Always obtain a signature, even for card-not-present transactions
• Always use fraud-prevention measures like AVS and CVV for card-not-present transactions
• Partner with a provider that makes it easy to search for transaction histories

Consider these 15 tips to avoid potential chargebacks.

Bottom Line

Chargebacks and fraud impact your reputation and your bottom line. Protect your business by making sure that staff follows practices to mitigate fraud, and be sure to review every chargeback as soon as it's received.

Do you see a system like this helping your business? Tell us how in the comments section below.