Chargebacks Overview

Chargebacks Overview

What are Chargebacks?

A chargeback is a credit card transaction that is reversed for the full or partial amount, by an issuing bank when their cardholder does not agree with the transaction. Chargebacks are typically used as a form of consumer protection when there is a problem with a purchase, such as receiving damaged or defective goods, not receiving the purchased item, or experiencing unauthorized transactions.

It is best practice for the cardholder to reach out to the merchant prior to filing a chargeback. Banks will often suggest contacting the merchant as the first thing to do in the chargeback process, but there are cases where the customer decides to bypass this outreach and continue to dispute the transaction.

Reasons for Chargebacks

There can be several reasons why chargebacks occur, including:

1. Fraud - Unauthorized or suspicious transactions lead customers to dispute charges to safeguard against fraudulent activity.
2. Duplicate Transactions - Multiple identical charges for a single transaction prompt customers to request chargebacks due to billing errors.
3. Credit not received / Refund not received  - Customers seek chargebacks when expected reimbursements for returns or cancellations are missing.
4. Product shipment issues (Did not arrive, shipping delays)  -Non-delivery or significant shipping delays prompt chargebacks as customers address inconvenience.
5. Product damaged  - Chargebacks occur when received items are damaged, defective, or differ greatly from expectations.
6. Subscription cancellation  - Chargebacks happen when customers are charged despite canceling a subscription.
7. General  - For various reasons like billing discrepancies or dissatisfaction, customers initiate chargebacks.
8. Unrecognized Transaction  - Unknown charges due to errors or fraud lead customers to seek chargebacks for account security.

The Chargeback Life Cycle

When a chargeback is filed, typically it will follow the flow shown here:

In summary, Helcim:

• Notifies you of the chargeback through our Chargebacks platform, email or a call from our Risk team.
• Debits the disputed amount, plus a chargeback fee, from your account. This amount, including the fee,  is returned if the dispute is decided to be in your favor.
• Guides you through the reasoning behind the chargeback and steps to move forward in our Chargebacks platform. 
• Provides a helping hand on how to properly counter the dispute in order to have the best chance of winning the dispute. 

Helcim will do everything to assist you in your case but does not exert any control over the final decision, as it is entirely determined by external parties.

Types of Chargebacks

There are multiple “types” of chargebacks and they represent different stages of the chargeback lifecycle.

Within those “types” there are statuses to track the progress of your dispute at a high-level.

How to prevent chargebacks

• Ensure clear communication with customers - Maintain clear and transparent communication with your customers throughout the entire transaction process. Provide accurate product descriptions, shipping information, and expected delivery times. Promptly address any customer inquiries or concerns to avoid misunderstandings that could lead to chargeback.
• Robust fraud prevention - Use secure PCI-Compliant payment processing providers throughout your transaction process like Helcim to easily filter fraudulent transactions or users.
• Easy refund and return policies -  Establish clear and customer-friendly refund and return policies. Make it easy for customers to request refunds or returns and provide a straightforward process for resolving disputes.
• Accurate product and service descriptions - Provide accurate and detailed descriptions of your products or services to ensure customers know what to expect. Include high-quality images, clear specifications, and any applicable terms and conditions. 
• Effective dispute resolution - Be proactive in resolving customer disputes before they escalate to chargebacks. Promptly address customer complaints or issues and work towards finding a mutually satisfactory resolution. 

Get assistance on chargebacks

• If you need assistance in navigating anything related to chargebacks, our amazing Risk Team can help you out. Simple reach out to chargebacks@helcim.com.