Chargeback

What is Chargeback?

A chargeback is a dispute resolution process that can be initiated by a cardholder with their bank or credit card company. It allows the cardholder to request a refund for a transaction that they believe was fraudulent, unauthorized, or not as described.

Successful dispute resolution can help merchants protect their revenue and reputation and ensure that their customers are satisfied with their products or services.

When is a Chargeback initiated?

A chargeback can be initiated by a cardholder for a variety of reasons, including:

1) Fraudulent transactions - A chargeback may be requested by the cardholder if the transaction was unauthorized or if their card was stolen and used without their consent.

2) Goods or services not received - In case the cardholder paid for a purchase but did not receive the goods or services, they can initiate a chargeback.

3) Goods or services not as described - If the goods or services provided to the cardholder were substantially different from what was advertised or promised, they can ask for a chargeback.

4) Technical issues - If the cardholder was charged incorrectly or multiple times due to a technical issue during the transaction, they are eligible to request a chargeback.

5) Subscription cancellation - If the cardholder cancels a subscription or recurring payment but continues to be charged, they can request a chargeback.

If your bottom line affected by bad debt write-offs and undiscovered disputes watch how to make collections follow-ups and dispute resolution In NetSuite

What are the risks of chargeback?

Chargebacks can pose several risks to merchants, including temporary loss of revenue, additional fees and penalties, damage to reputation, increased risk of fraud, and reduced ability to process payments. If a merchant has too many chargebacks, it can be an indicator of fraudulent activity or poor business practices, which may result in increased scrutiny from payment processors and banks.

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HighRadius Collections Software automates and optimizes the credit & collections management process to improve collector efficiency, minimize bad debt write-offs, improve customer relationships, and reduce DSO. It provides a complete set of tools to optimize and automate the credit collections management process and enable the better prioritization of credit collections activities All the information you need (invoices, dispute information, POD, claims, tracking info, etc.) on each case is automatically presented in a collections work-space and is ready for use. Apart from the wide variety of benefits that it has, it also comes with some amazing features like CADE (Collection Agency Data Exchange), collector's dashboard which has prioritized collections worklist, automated dunning & correspondence, dispute management, centralized tracking of notes, call logs & payment commitments along with cash forecasting functionalities. The result is a more efficient collections team that contributes to enhanced cash flow and reduced DSO. Improve your efficiency with our order-to-cash templates such as - A/R Aging Report, DSO calculation excel template, A/R Dashboard excel template, credit scoring model for new customers, 21 Credit-collections email template, and Our Ebooks.