972.415.3450 or 512.694.9146 Sally@PaymentOperationsGroup.com

Chargeback Season, you say? Still talking about it? Is it even a thing? Brace yourself – It’s upon us!

Last time we touched on potential external tools. This time let’s look at them more closely – because you may have one (or eight).

There are different approaches to chargeback deterrence that are used more commonly during this time of year and less so during the remainder of the year – specifically, refunds to prevent chargebacks. This is one of the most common ‘reactive’ strategies related to chargeback reduction. This concept is tied to waiting until there is a real chargeback triggering action and then hurriedly refunding the original sale to undercut the consumer’s ability to complete the chargeback process. There are a variety of vendors, processes, and even rules-based approaches. Some of these actions enter the transaction stream very early while others wait until the last possible moment to issue the refund. It is time to review your vendor, set-up, settings, and approaches to make sure of a few things:

  • Make sure you are using the tool to its best advantage. Obtaining the notice then performing so much research as to delay the refund could result in the chargeback still being effective. Then you have lost the refund and the chargeback value and must jump through additional hoops to try to retrieve one of them.
  • Again, make sure your tool is set up correctly. Refunding items that could never become a chargeback is a business decision, not a chargeback prevention strategy. If the original sale is 190 days old when the chargeback alert arrives, the chances are high that that item could never become a chargeback because it is too old. But how would your company have reacted if that customer was on the phone with your Customer Service representative? Would you have issued the refund to retain goodwill? Apply the same approach here – just be aware of that choice.
  • Try to use the tool as little as possible. Sounds backwards but remember, these items could have previously arrived via other contact channels and been denied a refund. Not all customers will contact the merchant first but for the ones that did, this chargeback process could have been forestalled. Perhaps identifying some characteristics of these contacts and taking a different action during the initial call/email would reduce the potential chargebacks at this stage.

Remember there are also tools you can use to be ‘proactive’ in your chargeback prevention tactics. Especially if you have an ongoing relationship with your customer through subscriptions or follow-on charges, enhance those charge descriptors to make sure those charges are clear and understandable.

Also consider sending the data and strong sale information to the Issuer during the contact process. This prevention tactic allows the Issuer to explain a lot about the transaction to the cardholder to divert the chargeback process entirely. This is a real-time data exchange process, and it can allow you to retain the value of the sale if the consumer simply didn’t understand the charge.

A great tool for long term awareness can add your logo to the cardholders’ statements during the charge. This service adds significant clarity when you had to shorten words in your charge descriptor.

Then look into which processes can be enhanced during this season of disputes and which changes, such as descriptor enhancements or logo displays, can be process improvements for years to come. Have ‘reactive’ tools and move into ‘proactive’ prevention stance as each improvement advances your revenue protection efforts.

 Payment Operations Group is a consultancy of Payment Professionals who ran away from home to join the circus. But seriously, if you would like to pursue a Strategy for your processing future or any payment engagement at all, contact information is provided below.

Payment Operations Group, LLC

Payments…Navigating, Educating, Strengthening.

Christine Wade



Sally Baptiste