2024 is set to be a challenging year, but losing revenue due to customer chargebacks doesn’t have to be a part of the struggle. Understanding how chargebacks work and implementing preventative measures can significantly reduce your risk. Let’s dive into what chargebacks are, the common reasons behind them, and steps you can take to protect your business.

What is a chargeback? A chargeback is a transaction reversal process that is initiated by a cardholder or their card issuing bank. It allows customers to dispute a credit or debit card transaction and request a refund from the merchant.

In the past year, we’ve seen over 4,500 incoming chargebacks, with the following top 4 reasons being:

  1. Fraud/No Cardholder Authorization
  2. Not as Described/Quality of Goods & Services
  3. Cancelled Services/Services Not Received
  4. Incorrect Amount/Duplicate Processing

To minimize the risk of chargebacks and effectively dispute them when they occur, it’s important to have strict procedures and clear documentation in place. Here are some tips to handle these types of chargebacks and strengthen your documents:

Fraud Prevention:

  • Name on Card and Bill of Lading: Ensure that all parties involved in the transaction are properly documented on your supporting documents. If the person paying for the move is not your customer, include their name on relevant paperwork.
  • Address Check: Verify that the address entered during manual transaction entry matches the billing address associated with the customer’s card.
  • Check ID’s: When collecting final payments, verify the cardholder’s ID in person or request photo ID and credit card be sent over for phone transactions to verify a match.
  • Signed Written Authorization: Obtain written authorization for the transaction amount from the cardholder. Ensure that the cardholder signs the Bill of Lading (BOL) or invoice for payment approval.

Not as Described/Quality of Goods & Service:

  • Delivery Acknowledgement: Include a section on your Contract(s)/Bill of Lading(s) where customers explicitly acknowledge receipt of services in satisfactory condition.
  • Damage Policy on your Bill of Lading: Provide a space on your BOL for customers to acknowledge and agree to your damage policy. Clearly outline your damage policy in your contracts, ensuring customers have the opportunity to sign or initial next to it.

Incorrect Amount/Duplicate Processing:

  • Detailed Charge Breakdown: Customers often dispute if the final total exceeds the initial estimate due to potential inaccuracies in item counts. Include a detailed charge breakdown on your contracts. Display the final total clearly on the signed BOL or invoice.
  • Verbiage on Estimate: Include a clear estimate statement and ensure it’s signed by the customer to acknowledge it’s an estimate and the final total depends on actual hours worked.
  • Handling Multiple Transactions: Comes into play when the customer pays for their total balance in multiple transactions. Ensure the customer signs off on the total at job completion. If possible, include separate payment details on your invoices/bill of ladings to clarify multiple transactions as separate payments toward the final total for card brands and the customer was not duplicately charged.

Cancelled Services/Services Not Received:

  • Cancellation Policy: Require customers to sign a cancellation policy with clear non-refundable deposit terms when booking. This can help resolve disputes if cancellations occur within policy terms.
  • Delivery Acknowledgement on Bill of Lading: Make sure your crew obtains a signature from your customer after the job has been completed. Proof of delivery can also help in instances where customers try to dispute claiming services were cancelled.

Partnering with a processor experiencing in handling industry-specific transactions can provide invaluable support. At Remedy, our Chargeback Concierge team is equipped to assist you effectively in case of chargebacks.

Protecting your revenue from chargebacks requires diligence, proactive measures, and a reliable support system. By understanding the process, addressing common pitfalls, and partnering with the right team, you can safeguard your business and focus on thriving in 2024 and beyond.

For further assistance or inquiries, don’t hesitate to reach out to our team at info@remedypayments.com or by calling 714-461-2200.

Remedy is powered by Chosen Payments whom is a registered ISO and FSP of Wells Fargo Bank, N.A., Concord, CA and BBVA USA, Birmingham, AL., and Elavon, Inc., N.A., Atlanta, Georgia, and Evolve Bank & Trust; Memphis, TN., and Merrick Bank, N.A., Draper, UT.