What Happens When a Customer Disputes a Charge?

About 99 percent of the time that a credit card is swiped, a customer and a business owner will conclude a mutually satisfactory transaction. In the case of GoPayment, a merchant swipes a customer’s credit card through a special mobile payments device, the transaction is authenticated, an electronic receipt is sent, and the customer receives the product or service he’s buying. Everybody’s happy.

Happy, that is, unless a customer disputes a charge made on his or her credit card statement. It’s rare, but this does happen from time to time.

Why Disputes Arise

A charge can be disputed for many different reasons, but the most common ones are:

  • The customer did not recognize the name of the business on his or her credit card statement
  • Goods or services were not received by the customer as promised
  • Goods or services were not received by the customer in the expected condition or manner as promised
  • The transaction was cancelled by the customer
  • The transaction was processed more than once
  • Someone else used the customer’s card without his or her knowledge

What Happens When a Dispute is Initiated?

When a customer disputes a charge made with GoPayment, this is known as a chargeback to the business account. In the event of a chargeback, three things usually occur:

1)      GoPayment removes the amount of the transaction from the business owner’s account.

2)      The business owner is assessed a chargeback fee.

3)      The business owner has a short time — usually about ten days — to provide evidence that the transaction was, in fact, valid. If this can be done, the money is eventually redeposited into the business account (but the chargeback fee is not refunded).

Preventing Chargebacks

A substantial number of chargebacks are the result of a simple misunderstanding, but business owners can take steps to minimize the chances of future chargebacks, including:

  • always requiring a signature for every GoPayment transaction
  • checking the signature on the touch screen and comparing it to the one on the back of the credit card
  • ensuring that the name of the business clearly identifies the type of product or service the customer paid for (for instance, make sure that Martin’s Cleaning Supplies appears on the statement instead of Martin Enterprises LLC) so the customer is more likely to remember making the purchase
  • making sure that any items to be shipped to the customer are sent within seven days of the transaction
  • when items are shipped, obtaining a copy of delivery completion and/or customer receipt of the item

Chargebacks are no fun for anyone. If you are concerned about customer disputes and chargebacks, GoPayment can answer any questions you might have — so don’t hesitate to contact us.

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