Sometimes a chargeback is simple. If you see an unauthorized charge, you may call the issuing bank and ask them for a chargeback. If you have reported the card lost or stolen, this request can be simple. However, what the usual chargeback definition refers to a complex chargeback process that involves the issuing bank as an arbiter deciding between the customer’s claim and the merchant’s counter-argument.
The chargeback process is more challenging than in the past. It has been complicated by the rapid increase in online scams and chargeback fraud. Since the COVID-19 pandemic began, the internet has been a setting for many forex scams and crypto scams. Many customers try to get their money back of they have been cheated by a merchant or a broker.
In addition, there has been a rise in chargeback fraud or so-called “friendly fraud.” This is a virtual form of shoplifting that involves the customer keeping the item while asking for a refund and filing a fake complaint. Issuing banks are inundated with legitimate and fake chargeback claims and must be selective about which ones they accept.
Therefore it is important to be well-informed about the chargeback process before your file a claim. Knowing the steps involved, criteria for fraud or dispute claims, and what issuing banks take into consideration in these cases can increase your chance of a winning chargeback claim and getting your money back.
Chargebax has the expertise and the right strategies to make your chargeback claim successful. We work with hundreds of banks and financial institutions and can communicate your case to your advantage.
Steps in the Chargeback Process
The chargeback process begins with a customer filing a claim with the issuing bank. The issuing bank is the bank that issues the credit card. The customer states why they think they need a chargeback and whether the issue is a fraud or a dispute.
The definition of fraud for the purposes of chargebacks is narrower than the way we usually talk about “fraud.” For instance, if we feel we have been swindled by a merchant or have been given a sub-par product or service, we may call them fraudulent.
However, this is not what an issuing bank considers fraud. In the chargeback process, a charge is fraudulent only if it is unauthorized. Therefore, whether the merchant is dishonest or legitimate, if you authorized the charge, it is in the category of a dispute rather than a fraud.
The issuing bank will consider the claim and decide whether they feel it is worth pursuing. They will then send the claim to the acquiring bank or the merchant bank.The merchant will be given a certain amount of time to respond to the claim, usually a couple of weeks to 20 days.
When the merchant responds, the issuing bank will decide in the favor of the customer or the merchant. The bank may ask for more documents or evidence before making its decision. Given the high volume of complaints and claims in the era of eCommerce, issuing banks usually like to wrap up the chargeback process quickly and avoid drawing it out. This means that the decision could be abrupt and it is no secret that the merchant or the customer is often unhappy with the outcome and the decision.
If the merchant or the customer is dissatisfied with the decision, they may take the dispute to litigation, but this of course involves hefty legal fees. That is why it is best for people to resolve the issue early on. In fact, the issuing bank usually asks for evidence that the customer approached the merchant with their complaint in an effort to resolve it before filing a claim with the issuing bank.
The Secret to Successful for Chargeback Claims
The secret to a successful outcome to the chargeback process is understanding and accepting that the burden is on the customer to prove why they are owed a chargeback. One shouldn’t live by the principle that “The customer is always right” in these cases, because, of course, the merchant is also a customer of the credit card company and chargebacks and refunds eat into their bottom line, so they are quick to fight these complaints.
Therefore, the more documentation you supply in the chargeback process, the better off you will be. Also having a fund recovery agency experienced with the chargeback process will be an asset when negotiating with issuing banks and making your case. It is important, from the beginning, to make sure that your claim clearly fits the right category. For instance, if a customer claims that the merchant is fraudulent when what they actually have is a dispute, the issuing bank may throw the claim out.
The reason customers may need a lot of evidence is the high incidence of chargeback fraud or friendly fraud. Therefore, issuing banks may be quicker to throw customer claims out than in the past, or if they accept a claim to examine it thoroughly and ask for multiple forms of evidence before they will rule in favor of the customer.
Be prepared with the documents you may need including:
- Records of transaction
- Communication with merchant
- Terms and conditions
- Claims and guarantees in advertising copy
- Product descriptions in an eCommerce site
- Photograph of the product
How a Fund Recovery Agency Can Help
There is no need to go it alone in the chargeback process. Working with a fund recovery agency can greatly increase your chances of a successful claim. Look for fund recovery experts who have extensive working experience with banks and understand how to negotiate on behalf of the customer.
How Your Chargeback Claim Can Be Successful
Given the increasing challenges in the chargeback process, you need to have someone on your side. Chargebax experts have dealt with numerous chargebacks and have helped our clients retrieve funds from crypto scams, forex scams, and merchant frauds. We have a strong working relationship with banks and can give you the strategies you need to get your funds back.