Chargeback Dispute Process and Guide

A Merchant's Guide to Protection and Resolution

As a merchant using IntaSend's payment platform, understanding chargebacks is crucial for protecting your business and maintaining healthy cash flow. This comprehensive guide will walk you through everything you need to know about chargebacks, from prevention to resolution.

What Is a Chargeback?

A chargeback occurs when a customer contacts their bank or mobile money provider to dispute a payment they made to your business. This process is designed by financial institutions, mobile money providers, and card networks like Visa and MasterCard to protect consumers from unauthorized or fraudulent transactions.

Think of it as a safety net for customers—but one that can significantly impact your business if not handled properly.

Common Reasons for Chargebacks

Understanding why chargebacks occur is the first step in preventing them. The most common reasons include:

• Non-delivery of goods or services - Customer paid but never received what they ordered

• Product/service mismatch - What was delivered doesn't match what was promised

• Duplicate payments - Processing errors resulted in multiple charges

• Incorrect amounts - Customer was charged more than expected

• Unauthorized transactions - Genuine fraud or identity theft

• Friendly fraud - Customers dispute legitimate charges due to confusion, buyer's remorse, or dissatisfaction

The Chargeback Process: Step by Step

1. Customer Dispute Initiation

The customer contacts their bank to dispute a charge, providing details about why they believe the transaction is incorrect or fraudulent.

2. Issuing Bank Review

The bank evaluates the dispute's validity and assigns a specific chargeback reason code that categorizes the issue.

3. Chargeback Filing

If the bank deems the dispute valid, they file a chargeback with IntaSend's partner bank and issue a provisional refund to the customer.

4. Merchant Notification

IntaSend immediately notifies you via email and dashboard alert when a chargeback is filed against your account.

5. Your Response Window

You have 7 days to respond—either accepting the chargeback or disputing it with evidence. Important: If you don't respond within 20 days, the chargeback is automatically accepted.

6. Evidence Review

If you dispute the chargeback, the acquiring bank reviews your evidence and forwards it to the issuing bank for final consideration.

How to Respond to a Chargeback

When IntaSend notifies you of a chargeback, follow these steps:

Step 1: Review the Dispute

Carefully examine the chargeback reason and customer details. Understanding the specific complaint will help you determine your best course of action.

Step 2: Gather Your Evidence

Collect documentation based on the dispute reason:

For non-delivery disputes:

• Shipping and delivery confirmations

• Tracking numbers and delivery receipts

• Customer communication about delivery

For service disputes:

• Service agreements or contracts

• Proof of service completion

• Customer acknowledgment of services

For fraud disputes:

• Transaction receipts and confirmations

• Customer verification records

• Security measures documentation

For general disputes:

• Order confirmations and invoices

• Product descriptions and images

• Terms of service agreements

• Customer communication records

Step 3: Evaluate Your Case

Assess whether you have strong evidence to dispute the chargeback. Consider:

• The strength of your documentation

• The potential cost versus benefit of disputing

• Your relationship with the customer

Step 4: Submit Your Response

To Accept: Email IntaSend stating your acceptance of the chargeback.

To Dispute: Draft a clear, factual letter summarizing your case, reference your evidence, and explain why the chargeback is unwarranted. Send everything to IntaSend via email.

Financial Impact and Fees

Chargebacks come with costs beyond the disputed amount:

• Chargeback penalty: $20 per chargeback

• Pre-arbitration fee: $30 (if the case escalates)

• Arbitration fee: Variable deposit required for arbitration

These fees are automatically deducted from your merchant account. If your account balance is insufficient, you'll need to deposit funds to cover the deficit.

Prevention Strategies: Your Best Defense

The most effective way to handle chargebacks is to prevent them from happening in the first place:

1. Enhance Customer Service

• Respond promptly to customer inquiries

• Address complaints before they escalate

• Maintain clear communication throughout the purchase process

2. Use Clear Billing Descriptors

• Ensure your business name is easily recognizable on customer statements

• Include contact information for customer inquiries

• Avoid confusing or generic descriptor names

3. Implement Customer-Friendly Policies

• Offer hassle-free refund options

• Create clear return and exchange policies

• Make it easier for customers to contact you than their bank

4. Monitor and Analyze

• Track your chargeback rates and patterns

• Identify common dispute reasons

• Continuously improve your processes based on feedback

Conclusion

Chargebacks are an inevitable part of doing business in the digital payment landscape, but they don't have to be a constant source of stress or financial drain. By understanding the process, responding promptly with strong evidence, and implementing robust prevention strategies, you can minimize their impact on your business.

Remember, the key to successful chargeback management lies in proactive prevention rather than reactive response. Focus on delivering exceptional customer service, maintaining clear communication, and keeping detailed records of all transactions. When disputes do arise, respond quickly and professionally with comprehensive evidence.

At IntaSend, we're committed to supporting you through every step of the chargeback process. Our notification system ensures you're always informed, and our team is ready to help you navigate complex disputes. By working together and following these best practices, you can protect your business while maintaining positive customer relationships.

Questions about chargebacks or need help with a specific dispute? Contact our support team at support@intasend.com—we're here to help you succeed.