Guide to Avoiding Potential Retrieval Requests and Chargebacks

A merchant account enables you to be able to accept cards for payments and in return you add convenience, cost- effectiveness and a professional image into your business. With these advantages come the liabilities associated with merchant accounts such as chargebacks. A chargeback is a transaction that has been disputed by a customer and is usually associated with high risk merchant accounts.

Also known as a reversal, chargebacks are forms of customer protection made available by the high risk merchant account provider. Once the cardholder files a dispute, the issuing bank or provider makes an investigation into the complaint.

Once the transaction is proven to be indeed fraudulent, the bank will refund the original value to the cardholder and take back the entire value of the transaction from your account, along with an additional fee. Additional processing fees may be charged for even a complaint that is proved to be untrue. It is best for businesses to avoid chargebacks at all times.

The most common reason for having a high chargeback merchant account are listed below –

• Fraudulent Transactions
• Credit Not Processed
• Item Not Received
• Technical Problems

Whenever there is a chargeback, there will be an accompanying retrieval request. A retrieval request procedure is initiated when a cardholder or a credit card institution disputes or questions a transaction. A retrieval request is a request from the customer’s card issuer to the merchant asking for documentation relating to a customer charge. A retrieval request may precede or be part of a chargeback.

To prevent chargebacks follow these steps when processing transactions and dealing with customers:

• If an authorization request is declined, don’t repeat the authorization request.
• Have the cardholder sign a receipt. Retain receipt copies for at least 18 months.
• For transactions not involving cards use AVS (Address Verification Service) and obtain the Card Security Code to confirm the purchaser is in possession of the card.
• Keep customers informed about transaction status, merchandise availability and delivery.
• State your refund, return and delivery policy properly.
• Display your phone number and contact information on receipts and invoices.
• If you ship goods, obtain and keep proof of delivery.
• Deposit sales and credit receipts as quickly as possible.