Understanding Debit and Credit Cards Chargeback

Chargeback is a scheme by which any you can get money back from your bank in case the transaction was unsuccessful. Or reversing a transaction from your card provider, in case of a disputed transaction linked to your credit or debit card.  Meaning when the good bought by the customer was defective, service provided was unsatisfactory or the delivery was not done even though the payment was done. The money is returned from the supplier’s bank and not from the supplier directly.

There are quite a few reasons of claiming a chargeback. The primary reason could be that the purchase made from the company had a displeasing outcome. Or the goods promised, were not satisfactory or were faulty. Another reason could be non delivery of the items. Besides there could be bank related issues like transaction processing error or multiple times/incorrect amounts being deducted by the bank. Lastly there could be cases of fraud related to the purchase. But chargeback is not legally procedure and is not protected by law.

The claim is addressed to the bank providing the debit or credit card services. The bank in turn asks for a refund from the supplier’s bank. Chargeback is not a guaranteed process, and there is no guarantee that the money will be recovered. Moreover there is no confirmation that the supplier will accept the reasons for a chargeback. As a result chances of getting the money back, seems bleak.

The process is to complain about the issue to your bank/card provider within 120 days of the purchase. After which the money back process is initiated from the supplier’s bank. If the complain is made under section 75 the credit card company becomes legally responsible. The chargeback is about Visa/ Master card/Amex process. In case the card provider rejects you charge back claims, the case can be escalated to the Financial Ombudsman Service.

Debit Card is applicable to all goods bought by debit card like Visa, Maestro and American Express Networks. Credit Card, charge back is applicable on goods costing less than a fixed amount. Debit Card chargeback process is a more difficult as compared to Credit Card, since the banks are less willing to cooperate. 

Charge Back Prevention: Essential for Smooth Run of Ecommerce Industry

Chargeback on credit card and debit card, now a days a great threat to ecommerce business. As we know online shopping portals were exclusively designed to make shopping easy, with the facility to enjoy it sitting at home or anywhere you feel comfortable.  Involvement of great technology has enabled shopping accessible worldwide on single click. And with payment gateway these company charge from the customer.

Recently, debit card charge back is a major problem that has obstructed the smooth functioning of ecommerce business. Not all the chargeback’s are fraud, some time there may be situation when the customer is not satisfied with the product rendered, there is also possibility of technical problem in bank server and so on, and in that situation there is no loss to the merchant, however, there is time kill that is crucial. But, now, people are using the chargeback for illegal usage, such as to make money  by using the product from the merchant and then file chargeback to receive the money back, this is a havoc situation for merchant, as they are in total loss firstly their services is been used and then they have to pay also.

There are many online legal bodies that provide charge back settlement solution for both the customer and merchant.   It is extremely distressing to receive fraudulent transaction on your credit card or debit card statement. Using advanced technology server can help you to trace whether the buyer is genuine or fraud. So whenever you are going to charge customers ask for the detailed information, as to distinguish from the real one. In many cases no chargeback gateway is under process, if the merchant is receiving bulk of chargeback cases.

There is need for the upgraded technology for the charge back prevention, so that merchant can fight with the fraudulent activity. With time technology is advancing, and it is always said that change or up gradation is the demand of time, so stay ahead of technology to beat fraudulent activity.  Now enjoy a smooth run in your business with competent and reliable charge back solution. Stay up dated to get profit share in your business.