4 must-see takeaways on chargebacks from our experts

How to manage chargebacks is a common question from our customers. Here’s a quick roundup of the key points we shared on a recent webinar.

1. Limit authorization disputes

Always authorize.
Authorization codes verify the availability of funds, helping decrease the risk for fraud.
 
Never force-post a sale.
If a transaction receives a decline response, request another form of payment and gain valid authorization.
 
Capture authorization.
Ensure your point-of-sale system captures authorization responses and prints the authorization code on the transaction receipt.

2. Avoid fraud disputes with best practices and security tools.

Always use EMV®.
And if the chip read fails, ensure proper fallback to swipe or key-entered authorization.
 
Use Address Verification Service.
If your employees must hand-key a transaction, be sure to input the billing zip code.
 
Validate and authenticate.
When hand-keying card-not-present transactions, use fraud protection tools such as Address Verification Service (AVS), Card Validation data (CVC 2, CVV2, CID) and 3D Secure technology. 

3. Collect compelling evidence to increase your win rate on certain fraud disputes.

What is compelling evidence?
Compelling evidence helps prove transactions were made by the cardholder. It’s primarily used to defend against fraud claims for card-not-present transactions, but it can also be used to support cardholder disputes, depending on the reason code.
 
Why collect it?
It can prove original transactions are valid, chargebacks are invalid and merchants acted in accordance with procedures and policies.
 
What constitutes compelling evidence?
  • Signed documentation (such as a sales draft) for the receipt of goods or services.
  • Correspondence exchanged between the merchant and the cardholder.
  • Transaction history with undisputed cardholder activity.

4. Be aware of signature capture and Visa Claims Resolution developments.

Major card brands frequently update their regulatory requirements for merchants. Here are two big changes:
 
Signature capture is no longer required.
  • Token and EMV technology have rendered signatures obsolete for validating transactions.
  • As of April 2018, Visa and Mastercard no longer require merchants in the U.S. and Canada to obtain signatures at the point of sale for credit and/or debit transactions.
  • Merchants may still choose to obtain signatures to comply with state law or as compelling evidence for dispute resolution.
 
Get ready for streamlined claims resolution.
  • Visa introduced Visa Claims Resolution (VCR) to reduce timeframes and touchpoints, and streamline processes, in the dispute process.
  • As part of VCR, merchants are required to respond to all chargebacks, regardless of whether they are refuting or accepting liability.
  • To meet the reduced timeframe requirements, merchants should consider enrolling in an online dispute management tool to send and receive their documentation electronically. 


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