Early Warning Signs for Chargebacks

Chargebacks are a merchant’s number one enemy when it comes to merchant accounts and credit card processing. However, Instabill performs a number of steps to help you prevent them from occurring.

Reviewing Credit Card Orders

The Instabill Risk Management Team reviews all transactions that pass through our payment gateway on a daily basis. We look for aspects that validate the transaction as well as for red flag signs of fraud, including:

  • Transactions placed within a short period of time
  • Shipping and billing addresses that do not match
  • Multiple purchase attempts on the same credit card
  • Multiple orders made using various credit cards but delivered to one address
  • Purchases made using expired credit card

When we encounter potentially fraudulent transactions, we flag them as “Pending” until you verify the purchase with your customer.

Support from Instabill Banking Partners

Each week, our banking partners send us files on suspicious or fraudulent credit card numbers. These fraudulent credit card files help us in helping you prevent transactions that transform into chargebacks. If we receive any fraud files pertaining to your merchant account, we will notify you immediately of the transaction.

We will ask you to provide your Instabill merchant account manager with proper documentation within 24 hours that validates the transaction. If you do not meet these requirements, we will refund the transaction to prevent a chargeback.

Telephone and Email Confirmations

Whenever we establish a merchant account for a new merchant, we contact their customers by telephone or email to confirm the legitimacy of their order. We ask customers to verify the following information:

  • Physical and email addresses
  • The website where they made the purchase
  • The method of placing the transaction (e.g., online, telephone)
  • Total transaction amount
  • Products or services ordered
  • Information that verifies the cardholder authorized the transaction

Website Requirements

Both Visa and MasterCard require e-commerce merchants to display customer service contact information on their website. They also require merchants to display clear terms and conditions, shipping policy, and return policy on their website. This way, customers can channel their inquiries directly to the merchant as opposed to contacting their credit card issuing bank to request a chargeback.

What Happens When Chargebacks Occur?

Although we do all we can to help merchants prevent chargebacks from arising, there are times where they still occur. Below are the steps Instabill takes when a chargeback transpires.

1. We notify the merchant immediately with the transaction detail and the reason for the chargeback along with the documents we need in order to dispute the claim. Merchants have three business days to email us the list of documents in order to dispute the chargeback with the acquiring bank.

2. If we have not received your documents to dispute the chargeback after the second day, Instabill will contact you by telephone or email to remind you that your time is running out.

3. Once we receive your chargeback dispute documents, we then forward them to the acquiring bank.

4. Finally, the bank will determine if it will approve the chargeback request or deny it.

For more information regarding preventing chargebacks or the reversal process, contact Instabill online or call 1-800-318-2713 today.

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