An acquirer is the financial institution that processes credit card payments for merchants. They’re basically the main support system in the chargeback world and give merchants the tools and help needed to stop and fight payment disputes. They also take care of all the technical parts of every transaction. Acquirers are the main link between […]
A chargeback alert is an early warning that lets merchants know when a customer starts a dispute. With these alerts merchants can take care of the problem before it turns into a formal chargeback that could hurt their ability to process payments. Most processors will send you these alerts within just a few hours after […]
Chargeback arbitration is where everything ends up if a dispute with a cardholder can’t be resolved any other way. At this point, an employee at Visa or Mastercard looks at the case and makes a ruling you can’t appeal. Cases with bulletproof documentation can go either way – it hinges on who reviews it and […]
Credit card associations are massive organizations that create and enforce all the laws and steps that everyone has to follow whenever payment disputes come up and need to get handled. Credit card associations like Visa and Mastercard don’t actually hand out cards to customers. They license their payment systems and branding to banks which then hand the […]
Credit card authorization is when your payment system double-checks that a customer actually has money in their account and they’re using their own card. The whole verification happens in maybe 2-3 seconds while your processor communicates with their bank and then you either get the green light or it gets declined. I worked with a […]
AVS is a fraud-prevention tool that verifies billing addresses in card-not-present transactions to help merchants cut down on chargebacks. When customers buy online, over the phone, or through mail order, they’re typing in their card information without physically presenting the card – which opens the door for fraudsters with stolen card numbers. AVS compares the […]
A Bank Identification Number (BIN) is the first 4-8 digits of any payment card number that tells you which bank issued the card. It’s a valuable tool that merchants can use to identify fraud patterns and stop chargebacks before they happen. The problem is that most merchants don’t pay enough attention to these numbers when […]
A credit card chargeback happens when a customer’s bank takes money straight out of a merchant account and returns it to the customer. The bank doesn’t need to ask first – they just take the money. This hits businesses hard because the sale is lost, fees between $15-$100 have to be paid, and if it […]
Compelling evidence is the documentation and proof that merchants have to pull together when they’re disputing fraudulent chargebacks. Merchants have to work faster to compile evidence that can show the transaction was completely legitimate and authorized when a customer contacts their bank and disputes a charge on their statement. This evidence package then stands as […]
A debit memo is an official document that adjusts a customer’s account balance upward, and it can actually help head off chargebacks before they start. It’s the first line of defense for correcting an undercharge or adding valid fees to a customer’s account. Most merchants miss how helpful debit memos can be for chargeback prevention. Maybe you […]
A dispute is when a customer calls their bank to question a transaction on their statement. It happens after they see a charge they don’t remember or think is wrong. Maybe they forgot about a subscription renewal or their spouse bought something without telling them. Next comes contact from the bank asking you as the […]
A dispute tracking program is how card networks monitor which merchants are receiving too many chargebacks. When I first came across these programs, it was shocking how rapidly they escalate – businesses that cross their limits face expensive consequences and might even lose the ability to process payments. So here’s where it gets expensive – […]
A double refund happens when you lose payment twice for the same transaction. First your customer gets their money back through the normal refund process and then they file a chargeback on top of that. At that point you’re out twice the original sale amount. Double refunds hit harder than most owners expect. You lose […]
EMV has become the standard used for chip-enabled payment cards, and it’s made to help protect merchants from those expensive fraud-related chargebacks. Customers insert or tap their chip cards at your terminal, and you automatically get protection from liability if that transaction turns out to be fraudulent. This protection wasn’t always available, and plenty of […]
Mastercard uses the Excessive Chargeback Program to monitor merchants with high dispute rates. If too many customers are disputing charges, they’re watching – and they’re not happy about it. The tracking programs and their fines caught my attention when first encountering them. They start merchants off at $500 a month. But these penalties can climb to $25,000 […]
I’ve handled payment disputes for years, and what’s still striking is how much chargebacks actually drain from a business. Let’s say that you have a hundred-dollar transaction that goes south. Between the chargeback fee (which usually runs you fifteen to twenty-five dollars), whatever penalties your processor decides to hit you with, and if you’ve already […]
A fraudulent transaction happens when somebody buys something without the cardholder’s okay, and to make matters worse, merchants wind up carrying the whole cost through the double whammy of lost revenue and those painful chargeback fees. These unauthorized purchases hit merchants hard from multiple angles at once. You lose the merchandise that you’ve already shipped […]
Friendly fraud is downright frustrating – it happens when a cardholder disputes an order that was completely legitimate (even though they placed it themselves). Merchants hate this because the transaction was completely fine. Payment went through just fine, the authorization checks passed and nothing looked suspicious. Customers got just what they ordered when they expected […]
A credit card issuer is the bank or financial company behind each card you carry, such as Visa, Mastercard, American Express, and Discover. When a customer swipes their card at your store, the issuer is the one who is fronting the money for that purchase in that moment. If the customer later gets upset and […]
A Merchant Category Code or MCC is a 4-digit number that payment processors use to see what business you run. This code can have a strong effect on how much you pay to process credit cards and on how closely banks watch your chargeback rates. Card networks use your MCC to figure out if they […]
A credit card merchant account is a separate business bank account that lets you take card payments from customers. Without one, you can’t accept credit or debit cards at all. When customers pay with their cards, the money doesn’t go directly to your standard business bank account – it goes through your merchant account first […]
Chargeback ratio measures how frequently transactions get disputed compared to total sales. Payment processors look at this number every month to decide if they should continue accepting credit card payments from the business. Businesses get taken aback by how strict the limits are. Visa caps merchants at 0.65%, and Mastercard gives a bit more room […]
A reason code is a short combination of letters and numbers that credit card networks use to explain why a customer decided to dispute a charge. A customer calls their bank to complain about a transaction they don’t remember seeing or aren’t happy with and the bank has to put that complaint into a category. Reason codes […]
SCA stands for Strong Customer Authentication and it’s a European regulation that makes customers verify who they are when they make electronic payments. PSD2 laws created this requirement. This extra security step has become one of merchants’ best tools for preventing fraud-related chargebacks. This matters quite a bit for your business. It gets much harder […]
Visa Strong Evidence 3.0 is Visa’s newest system that finally lets merchants fight back when customers file bogus fraud claims on online purchases – it gives store owners the tools they need to prove that a customer did make that purchase – even when the customer says they didn’t. It’s big news for business owners […]
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