The Chargeback Process

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In the article What is a Chargeback?, we introduced George—a merchant who sells weight loss supplements through his e-commerce website. One of his customers contacted their credit card issuing bank to request their money back, resulting in a chargeback for George. Now Instabill will explain the steps that take place during the chargeback process.

Initiating the Chargeback

Mary purchased goods from George's website using her Visa credit card—an account she shares with her husband. Leroy, Mary's husband, looked at his Visa billing statement and did not recognize her purchase because George did not provide any identifying details in the billing descriptor. Since Leroy believed the transaction was fraudulent, he called his credit card issuing bank to get his money back.

Leroy just initiated the chargeback process. His credit card issuing bank contacted George's acquiring bank. The acquiring bank then contacted George's merchant account provider. His merchant account provider immediately notified George of the chargeback. George has five days to gather supportive documentation to dispute the chargeback—a process known as a chargeback retrieval.

Chargeback Processing Fees

Regardless of whether George disputes the chargeback, he will incur a chargeback fee from his acquiring bank for having to process the chargeback transaction. George will incur a chargeback fee for every chargeback his customers initiate. Not only can this get costly, but too many chargebacks may result in your acquiring bank terminating your merchant account. For this reason, it is imperative for George, and you, to do all you can to prevent chargebacks and Instabill can help.

However, by ignoring the chargeback or losing the dispute, his chargeback level will increase, bringing him a step closer to losing his merchant account and credit card processing abilities.

Process Credit Cards with Instabill

If you want to process credit cards with a merchant account service provider that helps you prevent chargebacks, then take a minute to submit our contact form to the right. Not only will you be able to spot fraudulent transactions using our PCI-compliant payment gateway, but our risk compliance officers will also help you by monitoring your transactions for fraud. Fill out our free merchant account application and start processing credit cards with Instabill in as quickly as one week.

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