Best practices for managing chargebacks
What are chargebacks?
Chargebacks are claims made by customers that they did not receive a product or service paid for. Customers file these claims through their banks. When the banks receive these claims, they forward them to the merchant the payment was made to, disputing the transaction on their customer’s behalf.
Because of the way the payments industry is set up, if the customer’s bank does not receive feedback from the merchant within a specified timeframe, the funds are automatically returned to the customer’s account. The result is that not paying close attention to chargebacks can result in losses for your business. This article will teach you how to avoid that.
Where to find all your chargebacks
You can find all chargebacks logged against your business under the disputes section of your Paystack dashboard. All chargebacks logged on your dashboard come with a 24-hour timeframe. If there is no action taken on your part after this timeframe, the claims will be automatically accepted.
Responding to a chargeback
Accepting a chargeback
Accepting a chargeback means you successfully received the customer’s payment but did not provide the service or product the customer paid for. This could be for several different reasons due to technical issues or human error. When you accept a chargeback, you allow for the funds to be deducted from your settlement and reversed to the customer’s bank account.
Declining a chargeback
Declining a chargeback means you successfully received the customer’s payment and have provided a service or delivered a product to the customer.
You need to upload one or more documents to your dashboard to successfully do this.
Please make sure the document you upload contains details of the transaction such as:
- the disputed transaction amount
- the date the disputed sum was successfully paid and received by you
- the name of the beneficiary of the transaction
- a brief description of the service or service delivered to the customer
It’s important that the document uploaded contains all the details above and is legible to prevent losses.
Here’s a good example of a document you can use to decline a chargeback
Here are bad examples documents you can use to decline a chargeback
These provide no details about the transaction or customer to sufficiently decline the chargeback and may cause your business to lose the dispute.
Other best practices
- Please make sure documents are clear and legible. illegible documents may not be admissible and could lead to a financial loss if funds are reversed to the customer.
- Where applicable, make sure documents uploaded only contain details about the specific transaction that is being disputed. Please crop out any data that pertains to other transactions and other customers.
- Make sure to upload all relevant documents pertaining to a chargeback the very first time as there may not always be room for the chargeback to be re-opened.