Protect Your Shop from Illegitimate Credit Card Chargebacks

Episode Description

In this week’s episode of Beyond the Wrench, we are joined by Tyler Kattre, President, Wind River Financial. Tyler breaks down everything a shop needs to know about illegitimate credit card chargebacks. He explains common frustrations, how to handle chargebacks, and documenting chargebacks.

Watch the Full Episode

Common Frustrations with Credit Card Chargebacks

The process is set up and designed to favor cardholders and consumers. As a business owner, this can get very frustrating.
The frustration starts with, “Why do I have to deal with this?” For business owners, it can almost feel tedious, and there are a lot of things behind the curtains.
One thing to keep in mind is it’s still a very small part of the overall sale, and it’s meant to be that way.
Present transactions (ex. swiping/inserting a card) lessens chargeback risk tremendously. Non-present transactions (ex. e-commerce, orders over the phone) tend to be more risky.

How to Handle Chargebacks

The first thing to do, if able, is to contact the customer, and hear it straight from the source. The credit card company should be telling the customer to handle it internally.
If you can’t contact a customer, it’s about gathering the paperwork. It’s all about what you can document to prove a service was provided and show that to the card holders.
Present transactions are the best route to take, if possible. When doing a non-present transaction, it is hard to prove and give additional evidence that something was delivered or that the person on the internet was actually the one behind the transaction.

Document Chargebacks and Educate Yourself

When it comes to documenting, a lot of it can be common sense. Understand inventory, and keep records of sales.
If a business has a unique return policy, that’s where additional documentation becomes extremely important. Make it crystal clear that a customer knows what they’re signing up for.
As a new business owner accepting credit card payments, it’s easy to think credit card chargebacks will never happen. Stay proactive.
As a credit card processor, provide one-on-one onboarding to teach what could happen with credit card chargeback, good practices, and how to minimize chargebacks.
Learn how a processor partner and cardholder processes and looks at credit card chargebacks.