Watch the following video and learn how to avoid chargeback fee or find the tips here.
A Chargeback occurs when a credit card holder files a dispute or applies for a reimbursement to his/her card issuer/bank. A Chargeback fee is charged by the bank for the hassle involved in settling the chargeback. This fee may even apply when a chargeback is unsuccessful. Chargebacks are typically the result of credit card fraud or unusual high amount of transactioin, but there are instances when a credit card holder is unsatisfied with the product or service rendered (due to shipping damages, over charge, etc.).
Merchant’s should offer a clear description of the transaction, fulfill the purchase order as soon as possible and ensure the shipment is handled quickly with proper packaging. Merchant’s can also avoid chargeback’s by not over charging their customers with hidden fees or unexpected costs. This will lower the dispute claims and lower the chance’s of being categorized as a high risk merchant account.
There are around 40 reasons and circumstances, each resulting in a unwanted chargeback. A merchant account holder that processes and receives a chargeback will have to pay a “fine”, called a chargeback fee to the merchant processor or bank.
There are also Chargeback Insurance companies, which handle the arbitration process, covering all the expenses and refunding the merchant account holder.