A chargeback occurs when a cardholder contacts their issuing bank to dispute a transaction, and then the issuing bank submits a formal dispute case, leading to a payment reversal (refund to the cardholder). Not all cardholder dispute requests result in a chargeback. Chargebacks depend on whether the issuer submits a formal case.
When BlueSnap is notified of a chargeback, a hold is placed on your merchant account for the transaction amount. You have the right to dispute chargebacks for transactions you believe is valid by using our chargeback management services, described below. If a chargeback dispute is decided in your favor, we'll return the transaction amount to your account.
- The shopper did not receive the product or service.
- The shopper was dissatisfied with the product or service and was not able to reach a resolution with the merchant.
- The merchant did not refund the transaction in a timely manner.
- The shopper was charged twice for the transaction.
- The shopper was charged an incorrect amount.
- The purchase was not authorized by the shopper due to a stolen card.
These types of fraud occur when the shopper (or an authorized party) made the purchase and then requests a chargeback.
- Friendly fraud refers to situations in which a shopper claims a valid purchase was fraudulent, because they don't understand the process of a return versus a chargeback. This is generally an "honest mistake."
- Malicious fraud occurs when a shopper is intentionally attempting to abuse the system.
Depending on the chargeback reason, you might find it's in your best interest to dispute. In doing so, you can:
Recover lost revenue.
Defend your business against friendly and malicious fraud.
Challenge invalid chargebacks. Some situations include:
- A refund had been issued prior to the chargeback notification.
- The shopper requested a chargeback after the allowable time frame, as determined by the card brand.
- Chargeback liability had shifted to the issuer.
Reduce future chargeback occurrences. When an issuer sees you successfully dispute chargebacks, they may conduct more research on cardholder dispute requests before submitting a formal case.
You can prevent some chargebacks. It's always best to do that whenever possible. We provide some best practices below.
BlueSnap has partnered with Chargebacks911 to facilitate the dispute process and provide you with comprehensive reporting and analytics, as well as the opportunity to have chargebacks disputed on your behalf. We offer two service levels:
The following table highlights the capabilities of each of the service levels available to you. More detail is available in the descriptions below the table.
|Capability||Full-Service Dispute Management||Self-Service Dispute Management|
|Automated disputing of invalid chargebacks|
Automated responses to retrieval requests
Chargeback performance monitoring
Advanced analytics to identify root chargeback causes
Chargebacks of valid sales disputed on your behalf
Customizable thresholds to determine when chargebacks are disputed
Case Management so you can assign cases to your own agents
Case Builder so you can compile evidence and build your cases
Initial chargeback diagnostic report with recommended improvements
Based on transaction amount
Fixed price per dispute
This level is ideal if you want BlueSnap and Chargebacks911 to fully manage the chargeback dispute process for you.
- You'll receive an initial chargeback diagnostic report in which Chargebacks911 reviews your websites, user experience, and sales process. Chargebacks911 then recommends improvements to common business practices that can reduce chargebacks and increase dispute win rates. These recommendations are based on card network regulations, machine learning, and how merchant chargeback data compares to similar merchants.
- All invalid chargebacks are automatically disputed on your behalf. These are chargebacks that should not have been submitted by the issuer, such as chargebacks submitted after the allowable time frame set forth by the card brand, after a refund had been issued, and when chargeback liability had shifted to the issuer.
- We also dispute all chargebacks of valid sales, such as chargebacks resulting from friendly and malicious fraud.
- You can customize your dispute strategy by defining rules that determine when chargebacks are disputed.
- We respond to all retrieval requests on your behalf. Retrieval requests typically occur when an issuer requests more information about a charge before submitting a formal case.
- Detailed reporting and analytics are available right from your Chargebacks911 Console. You can view chargeback ratios by card brand and reason code, as well as view analytics to identify root chargeback causes.
Note: We only contact you if we need additional information to win the dispute.
To enroll in Full-Service Dispute Management, contact BlueSnap Merchant Support. You’ll receive an email explaining how to access your Chargebacks911 account.
Note: In order to successfully dispute chargebacks, Chargebacks911 requires access to any merchant information system that stores customer data and communications, such as a CRM, Order Management, and Customer Support systems. Chargebacks911 reviews your business practices (such as terms and conditions, refund policy, and sales methods) with you to identify any merchant-specific data attributes that may be required to dispute chargebacks. Typically, branded CRM systems and other branded systems store all the required information. If you use a custom system, Chargebacks911 will review the data available in each system and ensure that they have enough data to submit disputes on your behalf.
This level is ideal if you want to decide which chargebacks to dispute, and you are prepared to create and upload the dispute packages online. This would include disputing chargebacks when a refund was previously issued to a customer.
To help you manage and build your dispute cases, you’ll have access to two powerful tools in your Chargebacks911 Console:
- Case Management streamlines the dispute process by allowing you to assign cases to your own agents.
- Case Builder provides the structure for you to compile the evidence to submit strong cases. You’ll conveniently upload all cases right to your Chargebacks911 Console.
In addition, the comprehensive reporting and analytics described above are available right from your Chargebacks911 Console.
To enroll in Self-Service Dispute Management, contact Merchant Support at [email protected]. You’ll receive an email explaining how to access your Chargebacks911 account.
The chargeback dispute process consists of three steps:
When the card issuer informs BlueSnap about a chargeback, we notify you by email and the Chargeback IPN (if IPNs are enabled for your account) and we debit the transaction amount from your account.
If a chargeback is received, you cannot refund the transaction through your BlueSnap Console or API. Do not refund the shopper directly using cash, check, bank transfer, or another method, because you could potentially lose both the chargeback and refund amounts.
Depending on your service level, the chargeback may be eligible for dispute. We notify you by email and the Chargeback Status Changed IPN to inform you if the chargeback will be disputed on your behalf.
- If the chargeback will be disputed, the case is built and submitted for you.
- If the chargeback will not be disputed, you have the option to build the case yourself and upload it directly to your Chargebacks911 Console.
Outstanding disputes can be monitored from your Chargebacks911 Console.
Note: After enabling Chargebacks911 on your account, you can sign in to the Chargebacks911 Console from the BlueSnap Merchant Console by clicking Chargebacks, as shown below. (No need to sign in to both consoles).
The Chargebacks911 Console opens in a new tab.
It can take up to 75 days for the issuer to send their decision about your dispute. We notify you of their decision by email and the Chargeback Status Changed IPN. If the issuer resolves the case in your favor, we credit your account for the transaction amount.
Note: The cardholder has approximately 60 days from the resolution date to file a re-dispute.
If the issuer resolves the case in the cardholder's favor, the transaction is canceled and the transaction amount is not returned to your account. If, at that time, you want to pursue the case further, you must resolve it with the shopper directly or seek legal advice. BlueSnap will no longer be involved in the dispute.
Note: There are significant costs involved to continue to pursue a dispute after the issuing bank has decided in the cardholder's favor.
- Disputing a chargeback does not guarantee the issuing bank will reach an agreement in your favor.
- Chargeback dispute resolutions are not decided by BlueSnap and are solely determined by the rules and regulations set by the card payment brand.
Chargebacks can be costly. You can lose the dollar amount of the transaction being charged-back and the cost of the goods, as well as incur chargeback fees. If you sustain a high level of chargebacks, you can also lose your ability to process card transactions. The following are some best practices that can help you prevent chargebacks.
Implement a fraud prevention strategy to stop fraudulent transactions at the point of sale, and therefore reduce the number of fraud chargebacks you receive. See BlueSnap's Fraud Prevention Service Levels to learn about your options.
Contact BlueSnap Merchant Support to sign up for Fraud Alert Services. You get notified when a shopper disputes a charge with their issuer. These alerts let you resolve the dispute directly with the shopper before it turns into a chargeback.
Ship merchandise and then charge the shopper’s card to minimize the likelihood of the shopper contacting their card issuer to dispute billing.
Advise the shopper in writing if they've ordered merchandise that is out of stock or unavailable. Let them know when the merchandise will be delivered or let them choose between selecting a similar item and canceling the order.
Inform the shopper of the statement descriptor that appears on their card statement. After the purchase, you could display a message such as: "You will see a charge from 'Your Company Name' on your card statement.” Ensure website branding is consistent with the statement descriptor as well.
Maintain detailed and accurate product descriptions on your website to prevent disputes related to shopper dissatisfaction with the product. The more detail you provide, the better.
State your customer support contact details and hours of operation clearly on your website to let shoppers easily reach a company representative.
State your refund, return, and cancellation policies clearly on your website, making sure they are displayed at the final point of checkout. You could require the shopper to proactively check a box to agree to your policies. More lenient return policies may also prevent chargebacks.
Honor requests for subscription cancellations. If a shopper requests cancellation of a subscription billed periodically (such as monthly), cancel the transaction immediately or as specified by the shopper. Advise the shopper in writing, stating the effective cancellation date.
Communicate future charges, and terms and conditions clearly on your website, product pages, and checkout page. You could have the shopper select a checkbox to acknowledge that they understand there will be future charges.
State trial period terms and conditions clearly on the checkout page. A clickable checkbox agreement with terms and conditions should be on your website, requiring shopper agreement before the purchase is finalized.
Send emails to notify shoppers of important events. For example, an email notification that their trial period is ending and that it will convert into a paid subscription, and an email that notifies them about upcoming account debits. These help shoppers to stay informed of subscription events, thereby reducing the chance that they'll be caught off guard by a charge on their statement.
Fight friendly and malicious fraud to prevent future chargebacks. If a card issuer sees that you never dispute chargebacks, they may be inclined to submit a chargeback without questioning the cardholder. However, if you regularly dispute chargebacks (and win), the issuer may conduct more due diligence of questioning the cardholder before submitting the chargeback.
Updated about a month ago