Managing Chargebacks

Chargebacks are a common part of accepting card payments. They occur when a cardholder or their issuing bank disputes a transaction.

Fraud/non-fraud chargebacks

Fraud-related chargebacks

Fraud-related chargebacks occur when:

• The cardholder does not recognise the transaction
• The cardholder did not authorise the charge

Non-fraud-related chargebacks

Non-fraud-related chargebacks may occur when:

• Cardholder was charged twice on the same transaction
• Goods or services were not received, were defective, or were not as described
• Recurring charges continued after the cardholder requested cancellation

Preventing Chargebacks

While chargebacks cannot be eliminated entirely, there are steps you can take to reduce how often they occur and improve your ability to respond.

Implement fraud prevention measures

Strong fraud controls help reduce unauthorised transactions and lower the risk of fraud-related chargebacks.

Resolve customer disputes promptly

Responding to disputes early increases the chance of resolving them before they escalate into chargebacks.

Use a recognisable soft descriptor

Use a business name that your customers easily recognise to avoid confusion about what a transaction relates to.

Communicate a clear refund policy

Clearly display your refund policy on your website, even if your policy is “no refunds”. This helps customers understand how to request a refund and encourages them to contact you directly instead of filing a chargeback. Make it easy for customers to contact support if they have concerns.

Clearly state your Terms and Conditions

Require customers to accept your terms and conditions during sign-up and at the point of payment.

Keep clear records and supporting evidence

Ensure your platform records the following transaction details:

• Transaction date and time
• Transaction description
• Transaction amount
• Buyer and seller names
• Payment information (such as the payment method or card used)

In addition, ensure your platform captures:

• User login history
• User email addresses
• User IP addresses at login and payment
• Correspondence between your business and customers, or between users

Your platform should also be able to provide or enforce:

• Sales agreements
• Signed proof of receipt for goods or services
• Evidence that services were delivered
• Invoices or documentation showing that goods or services matched what was described
• Documentation confirming goods are not counterfeit
• Evidence that the terms of sale were not misrepresented
  

 

Clear communication, strong record-keeping, and early dispute resolution are the most effective ways to reduce chargebacks.