Chargeback Prevention vs. Chargeback Management

Chargeback Prevention vs Chargeback Management

Chargeback Prevention vs Chargeback Management is a dispute resolution process. Chargeback Prevention is very different than chargeback management. There are many chargeback management services that offer dispute representation in that, when a chargeback occurs. They will represent the merchant in the dispute resolution process and respond with the necessary documentation. Hopefully, win the dispute so the merchant hasn’t out the cost of the sale. In addition to having the chargeback on their record.

That’s right! Winning the dispute does NOT cancel out the chargeback!

This is very important to understand since having an excessive amount of chargebacks can result in the termination of a merchant account. See Chargebacks Explained for detailed information on chargebacks and their implications.

Chargeback Prevention is a service that intercepts chargebacks at the credit card holders issuing bank and sends an alert to the merchant who can then issue a refund BEFORE the chargeback is ever issued!

This eliminates the chargeback entirely and helps the merchant maintain a good processing history and preserve his existing merchant accounts.

Esecurepay’s Chargeback Prevention services typically reduce chargebacks by 30%-40% or more and is compatible with most card processors without requiring an Esecurepay merchant account or use of the ESECUREPAY Internet Payment Gateway.

See our list of Chargeback Reason Codes for MasterCard, Visa, Amex, and Discover to understand the causes of chargebacks. How they has reported with the different credit card companies.

Chargeback Prevention vs. Chargeback Management

A consumer may initiate a chargeback by contacting their issuing bank and filing a substantiated complaint regarding one or more debit items on their statement. The threat of a forced reversal of funds provides merchants with an incentive to provide quality products, helpful customer service, and timely refunds as appropriate. Chargebacks also provide a means for reversal of unauthorized transfers due to identity theft. Chargebacks can also occur as a result of friendly fraud, where the transaction was authorized by the consumer but the consumer later attempts to fraudulently reverse the charges. Card association chargeback rules are available online for public inspection and review.

They comprise a system for adjudicating transaction disputes between cardholders and merchants. Primarily where the issues have resolved based on documentary evidence incident to the transaction. The rules provide for arbitration of issues by the card association. This may occur where the card issuer generates a second (or “arbitration”) chargeback against the merchant. After receiving the merchant’s response to the initial chargeback. Normally this would require the cardholder to rebut elements of the merchant’s response. Therefore, The second chargeback results in a second crediting of the cardholder’s account for the disputed funds. After having credited back to the merchant with its response to the initial chargeback. The merchant’s only recourse after the second chargeback is to initiate arbitration of the dispute by the card association. The fee for this is on the order of $250, and the arbitration loser is then obligated to pay the costs of the arbitration.

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