Does it sound familiar: you opened your virtual store a while ago and closely monitors each order that comes through. Looks through them, one by one. You start to see the number of orders increasing, someone even mentions your store on a social network. Everything is running smoothly, until the day it arrives: your first chargeback.
One of your clients challenged the sale, saying he wasn’t the one who purchased at your store, and the bank debited that value from you. Deep inside, you knew this day would arrive, but never thought it would be so soon. What now? See a few tips on how to deal with this uncomfortable situation.
Understand this: it happens to everyone
The average fraud in e-commerce is of approximately 1% of the turnover. It is part of the e-commerce routine, and sooner or later it will happen. Measures must be placed to decrease and avoid frauds in your e-commerce, as well as procedures to go after the chargebacks that do arrive.
Find the order
It may seem simple, but depending on the case it isn’t quite as simple as it seems. When you receive a chargeback notice, whether by e-mail or through the post, it usually states the date and the value of the order, as well as the truncated number of the card (i.e.: 411111**1111). If many of your orders have the same value – if you sell a $39.90 subscription, for instance – it’ll be quite difficult to find the transaction based only on the date and value.
That is why it is important to be able to filter by the beginning of the card number. Unfortunately, many systems don’t allow this and the identification of the order becomes more difficult.
Not all chargebacks are linked to a fraud. Many times, the reason is a simple commercial misunderstanding, where there was an issue in the delivery of the product and the client asked for the cancellation of the charge. In other cases, it can be that the client simply forgot he had purchased from you and thought the entry in his invoice odd.
If you can get hold of the client and explain what happened, great! Your problem was solved.
If you weren’t able to speak to the client, it’s time to start gathering evidence. Recover all data from the order and the delivery in order to build your case: authorization code, client name, delivery address, IP address, transaction logs, post-office receipt. Everything counts.
Until last year, not much could be done in order to revert a chargeback, even if you had all evidence with you. However, the card operators have recently opened the contestation process, where the store owner has the opportunity of proving he has delivered the product accordingly and is the client who is not being honest. Some people will say this reversion process does not work, but it does exist.
If you prove you were the victim of fraud, investigate to see if it has stopped or not. Many fraudsters use the same registration to fraud a store until they get tired, and there may be open orders in your system for the same user. Check if there are no other orders with delivery to the same address, with the same registration data, such as IP, e-mail, or credit card. Block everything you can find until you are able to review them individually.
Receiving a chargeback notification is never a good thing, but **it is not the end of the world. It’s important to be aware and check if it’s an isolated case or a sign of a greater problem. When in doubt, always try to contact the client and your credit card operator.
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