This guide to chargebacks & disputes will explain what a chargeback is, how OOLIO deals with chargebacks, how you as the merchant can deal with chargebacks.
What is a Chargeback?
A chargeback is a dispute transaction requested by the account holder initiated through their issuing bank. Based on their decision made within the chargeback process, the issuing bank will request the card scheme (eg Visa, Mastercard, AMEX) to reverse the charge made on the customers card or not proceed with the dispute claim. The card issuing bank will initiate a chargeback unless they are able to quickly determine that the dispute is invalid. If initiated, the chargeback process will begin.
How does OOLIO Deal with Chargebacks?
OOLIO takes chargebacks seriously.
We will reach out to you to see whether you would like to contest the chargeback If you choose to contest, OOLIO will request evidence from you to defend the chargeback (e.g. receipts, information on the transaction, etc.) to build a case to contest the chargeback. Once OOLIO has presented the evidence to the acquirer, the card issuer generally has between 30-45 calendar days to dispute the defence given.
It is to be noted that the chargeback process can take up to 12 months to completely finalise the process.
Timeline
Are there fees incurred with Chargebacks?
A chargeback dispute incurs a fee of $30.00 charged by the Acquirer for processing of the chargeback. When a chargeback is raised, the merchant will be deducted the chargeback fee the business settlement.
How can YOU (the merchant) prevent Chargebacks/Disputed Transactions?
Although it is hard to completely prevent all fraudulent transactions, there are ways in which you can mitigate the risk of them occurring at your venue.
- Processing payments through Mail Order/ Telephone Order (MOTO) or eCommerce transactions have less security measures in place, this means that when you are processing these sorts of transactions extra consideration should be taken in the details and amounts being correct.In the instance of taking a MOTO transaction, you can implement internal measures to make sure that the customer who actioned the MOTO transaction;
- Ask to sight the physical card at collection of goods/services that was used within the transaction and validate that the cardholder is the one who actioned the transaction with Photo ID at collection also.
- Providing contact information so the customer has an opportunity to contact the merchant directly before disputing a transaction.
- Utilising security measures (e.g. video surveillance) to verify transactions occurring or goods being received when a charge is disputed.
- Blocking fraudulent customers through the merchants POS system will mitigate returning fraudulent customers.