A chargeback is the long drawn out version of a refund. The easiest way to deal with one: Stay on top of a request from a customer and send them the refund. They have up to six months to ask for their money back before they go for the chargeback, but it just is so much simpler to take care of the situation before it gets out of hand.
It can take months
A chargeback can take a long time, and if you just take a few steps with the customer to verify why they want the refund, you can prevent it from growing into a monster of a nightmare.
- Did they forget they made the purchase?
- Was the product damaged?
- Did they just need something else that went with the product that wasn’t included?
- Do they need to send something back and get a new model or something different that will work better?
Once these are answered, you can better assist the customer with their endeavor. Take care of your customers and they will take care of you.
As for the chargeback
These are the procedures for the chargeback and how it happens.
• The cardholder will contact the bank that issued their card.
• The bank researches the customer’s request to see if it is valid.
• If the evidence is insufficient, it is denied and the cardholder has to pay the bill. The request ends right there.
• If the evidence is sufficient, the customer will be given a temporary refund, and the bank goes after the processing bank for the money it is owed.
• Now the merchant’s processing bank begins to research what has happened.
• If they decide it is valid, they will accept the charge.
• They will notify the merchant of the reversal going on and will take back the amount that the customer paid.
• The merchant either accepts the refund taken from them, or they produce documentation that it is not a valid issue.
• If the merchant’s bank decides that the documentation proves that the customer should not have a refund, then the customer is once again charged for the purchase.
• And of course, if it is not found sufficient enough evidence, then the merchant will have to lose that money. That is when the chargeback process completes itself.