Chargeback Prevention: Key Strategies for High Transaction Volumes in Summer
In running a business, owners often face this headache: A customer clearly made a purchase in-store, but later went to their bank claiming there was an issue with the transaction, or even reported the credit card was stolen and requested a refund.
For many small and mid-sized merchants, this situation can feel overwhelming. Even when you’re in the right, proving it isn’t always easy.
Today, let’s talk about what a chargeback really is, and explore some practical strategies to deal with it.
What is a Chargeback and Why It Matters
A chargeback occurs when a customer disputes a transaction and requests a reversal through their card issuer. Common reasons include:
- Unauthorized transactions
- Non-receipt of goods or services
- Product quality complaints
- Billing errors
Chargebacks not only result in immediate loss of funds but also incur chargeback fees and damage your merchant reputation.
How Do Chargebacks Happen?
When a customer is dissatisfied with a purchase, they can file a dispute with their issuing bank within 6 months of the transaction. Once the bank accepts the request, the case will be sent to the credit card network.
The acquiring bank deducts the disputed amount (plus any fees) from the merchant’s account and issues a chargeback notice. The merchant can either accept the loss or submit evidence to contest it. If the evidence is compelling, the issuing bank may reverse the chargeback. If not, the case can be escalated to the card network for a final decision.
How Should Merchants Respond?
1. Keep Receipts
Printed receipts remain the most important proof of transactions. Merchants should keep them for at least 6 months (some industries recommend 18 months).
- For regular transactions, printed receipts and terminal records serve as the primary evidence. Whenever possible, having the customer sign the receipt, even if there is no designated signature field, provides stronger proof in the event of a dispute.
- Extra evidence like surveillance footage or identity verification is even better.
- For large transactions: ask customers to sign an invoice for stronger proof in case of disputes
2. Respond Promptly
Once you receive a dispute notification, immediately upload signed receipts and explain the service provided and amount charged. Add a note that the customer did not raise any objections at the time or afterward.
If disputes occur repeatedly with the same customer, you may also point this out in your response.
3. Keep Following Up
Some customers may file multiple disputes. But as long as your evidence is complete, most chargebacks can be reversed.
How to Reduce Chargebacks?
Serve with Integrity
Double-check order details right after payment to avoid errors that cause dissatisfaction. Regularly train employees to maintain consistent product and service quality.
Pay Attention to Details
Record and handle customer feedback promptly (especially from new customers). This prevents small issues from escalating into refund disputes.
Use a robust POS system, such as uServe POS, which:
- Automatically saves electronic receipts,
- Provides reports and customer lists,
- Helps merchants prepare evidence even before problems arise.
Ensure Secure Payments
Whenever possible, use chip insert (EMV) instead of swipe payments. If conditions allow, verify customer identity for additional transaction security.
We Can Help
Ready to protect your business from chargebacks this summer? Contact us today for a free consultation on payment processing solutions and fraud prevention strategies that fit your business needs.
📞Call us at: 888.885.8358
✉️Email us at: leads@letsgoup.com
Disclaimer: The information provided in this article is intended for general informational and educational purposes only. It should not be interpreted as legal, financial, or professional advice. Universal Processing makes no representation or warranty as to the accuracy, completeness, or timeliness of the content. For guidance on your specific circumstances, you should consult with a qualified attorney, accountant, or other licensed professional in your jurisdiction.
