Not every chargeback can be prevented. However, consistent transaction-processing, customer-service, and recordkeeping practices may help reduce the risk.
These practices can also help you maintain useful information if a transaction is later disputed.
Process Transactions Carefully
Use the Appropriate Payment Method
When the cardholder is paying in person, use the card’s chip or contactless feature when available. This allows the transaction to be processed as a card-present payment and provides stronger transaction information than manually entering the card number.
A payment link may be appropriate when the customer is paying remotely or when a payment request is sent while the customer is awaiting services. Payment links allow customers to enter their own payment information.
For payments completed through a payment link or by manually entering the card information:
- Collect available Address Verification Service (AVS) and Card Verification Value (CVV) information.
- Review the AVS and CVV responses as part of your normal transaction review.
- Confirm that the customer understands the amount and purpose of the payment.
- Keep the payment confirmation with the related estimate, invoice, customer, patient, or service record.
Why EMV, AVS, and CVV Matter
EMV chip and contactless payments provide information showing that the physical card or payment device was used for an in-person transaction.
AVS and CVV provide additional fraud-screening information for keyed transactions and payment links. The results may help you evaluate the transaction and provide useful information if the payment is later disputed.
An AVS or CVV match and an authorization approval do not guarantee that the transaction was completed by the cardholder or that it will not be disputed.
Need a Smart Terminal? Administrators can order one by selecting More → Order Supplies in the PayJunction Virtual Terminal. See How Do I Order a New Smart Terminal?
Review Your AVS Settings: AVS settings can be configured for each applicable PayJunction terminal or service. See How Do I Change My AVS Security Settings?
Review the Transaction Before Completing It
- Confirm the transaction amount with the customer.
- Process each transaction only once.
- Void an incorrect transaction promptly before processing the corrected amount.
- Review unexpected AVS or CVV responses.
- Pause and review transactions involving repeated declines, multiple cards, or other unusual activity.
Do Not Complete a Declined Transaction
Do not force or complete a transaction after it is declined. Ask for another form of payment or have the customer contact their card issuer.
Multiple declines, repeated payment attempts, or the use of several different cards may indicate increased risk.
Review Unusual Payment Activity
Consider taking additional steps to verify a transaction when you notice activity such as:
- Multiple declined payment attempts
- Several different cards used by the same customer
- An unusually large transaction from a new customer
- A customer pressuring staff to complete a transaction quickly
- A request to deliver merchandise to someone other than the person making the payment
- Billing, shipping, customer, or transaction information that does not appear consistent
The appropriate verification steps depend on your business and the transaction. If you cannot reasonably verify the customer or transaction, consider requesting another form of payment.
Clearly Communicate Your Policies
Make your refund, return, cancellation, deposit, and recurring-payment policies clear before completing the transaction.
When appropriate:
- Display the policies where the customer can review them.
- Include the policies on estimates, agreements, invoices, or receipts.
- Obtain the customer’s acknowledgment of the applicable terms.
- Provide copies of signed agreements or transaction documents.
- Explain whether deposits or advance payments are refundable.
- Confirm recurring-payment terms and cancellation requests in writing.
Policies should be easy to read and should accurately reflect how your business handles cancellations, returns, refunds, and recurring payments.
Keep Customers Informed
Clear communication may help resolve concerns before they become disputes.
- Use a recognizable business name on receipts and billing statements.
- Provide an itemized receipt or invoice.
- Confirm important transaction details in writing.
- Notify the customer if delivery or service will be delayed.
- Do not substitute a different product or service without the customer’s agreement.
- Respond promptly when a customer reports a concern.
- Process an agreed credit or refund promptly and notify the customer when it has been completed.
Resolve Concerns Before a Chargeback When Possible
If a customer contacts you with a concern before filing a chargeback, work with them directly when possible.
Once a chargeback amount has been debited, do not issue a separate refund for the same transaction.
Maintain Organized Records
Keep transaction and customer records in a location where they can be located quickly.
Depending on your business, useful records may include:
- Itemized invoices or receipts
- Signed estimates, agreements, or authorizations
- Proof of delivery or customer pickup
- Service, treatment, or completion records
- Refund, return, or cancellation policies acknowledged by the customer
- Credit or refund confirmations
- Emails, text messages, and other customer communications
- Notes documenting important conversations
- Complete PayJunction transaction details
Records should clearly identify the customer, transaction, product or service, and relevant dates.
Train Your Staff
Employees who accept payments or communicate with customers should understand:
- How to respond to declined transactions
- When to use chip, contactless, payment-link, or keyed-entry methods
- How to review available AVS and CVV responses
- How to recognize unusual payment activity
- How to explain your business’s policies
- Where transaction and customer records are stored
- Who to contact when a transaction requires additional review
Staff should know that an authorization approval does not eliminate fraud or chargeback risk.
If You Receive a Chargeback
Even businesses with strong prevention practices may receive chargebacks.
Review the Official Notice and Bank Documentation before responding. Your response should address what the cardholder is disputing and include relevant supporting documentation.
No transaction procedure, policy, or supporting document guarantees that a chargeback will be resolved in the merchant’s favor.