Chargebacks can be costly for your business, but some simple steps can help reduce chargeback fees. A chargeback occurs when a cardholder successfully disputes a transaction processed by your business and has it reversed on their VISA or MasterCard account.
The chargeback process
When a cardholder or card issuer has any reason for concern regarding a credit card, VISA debit or debit MasterCard transaction, a dispute can be raised to authenticate the transaction.
If the cardholder advises that they didn’t make the transaction, or didn’t receive the goods or services purchased, the cardholder sends a formal advice of dispute to their card issuer. The card issuer then notifies us of the chargeback request. If further information is required, we'll send you a letter requesting supporting documentation, such as sales vouchers and/or tax invoices to send to the cardholder for validation. If the information you provide doesn’t validate the sale and/or delivery, your business will be charged the disputed amount and the chargeback fee.
Common causes for chargebacks
- Key entered transactions occur when card details are manually entered into the terminal instead of tapping, inserting or swiping the card. This by-passes the card’s security features and greatly increases the likelihood of fraud. If a dispute is raised by the cardholder, the merchant will be liable and will be obliged to pay the funds back to the cardholder, as well as any applicable chargeback fees.
- Requested transaction data not received.
- Requested/required item illegible or missing.
- Required authorisation not obtained.
- Transaction amount differs to purchase.
- Duplicate processing.
- Card not valid or expired.
- Cancelled recurring transaction.
- Late presentment of manual vouchers.
- Cardholder dispute – defective/not as described.
- Non-receipt of merchandise or services.
- Cardholder didn’t authorise the transaction – potential fraud.