Fighting chargebacks is important and a process you should bake in early within your customer success/support model however, once the chargeback is raised, win or lose, that strike is made against you as a merchant. It is important to do the legwork to mitigate chargebacks from occurring, where possible. This is the true challenge facing most companies today. More often than not, it is usually far easier for a user to raise a chargeback with their bank than it is to cancel a subscription directly with a provider.

Taking advantage of early signals to proactively reach out to users or even refund and cancel, prior to any chargebacks being raised, is a surefire way to start reducing chargeback volumes down. There will always be a continual flow of chargebacks (especially friendly fraud) that runs through any business taking payments but, by taking steps early, you can vastly reduce the risk. Here, we are taking a step even earlier in the funnel to look at ways you can avoid chargebacks or at least give yourself a fighting chance.

For ease, I have split the categories between fraud and non-fraud however, many of the suggested actions and practices benefit either side in trying to avoid chargebacks being raised in the first place.

Fraud

Collect as rich customer details as possible/viable. There will always be a trade-off here on how much you collect at checkout and having a slick, fast process for the user. The issuer will send across the transaction and customer details as part of the chargeback, so you should be able to tell immediately if it matches the details (or similar). Customer details such as:

• Name
• Address
• Post Code
• Existing Account Details (if applicable)
• Previous orders/payments
• IP address
• Phone Number
• Email
• Device
• Payment Method
• If physical goods
• Tracking
• CCTV

Collecting these details during the transaction, sign-up/purchase reduces the likelihood of fraud being carried out, especially if you are performing AVS checks on the address etc. Should a chargeback be raised, having completed this upfront due diligence, you then have a suite of data to choose from to fight the chargeback.

Non-Fraud

These can be specifically split based on reason code but generally, these are areas you want to think about:

• Recording that a resolution was offered to the customer
• Proof that goods were shipped or services were available
• Evidence of refund
• Proof customer didn’t attempt to resolve directly with merchant first
• Proof that the goods were not returned, nor an attempt was made to return them or to cancel subscription
• Evidence to show that a refund wasn’t due
• Any evidence to show Chargeback was raised before the date of agreed refund

Reason code specific points to consider

• Goods or Services Not Provided
• Proof that goods were delivered to the address on the order (if physical goods)
• Tracking and Courier Information
• Proof that Service was provided on expected date (account activity)
• Goods or Services Not as Described or Defective
• Evidence that goods ordered and delivered were exactly as described
• Proof that the goods were not damaged when these arrived to the customer
• Proof that Service was provided on exactly as advertised
• Credit Not Processed
• Demonstrate that a resolution was offered to the customer
• Evidence that refund was processed to their account - Including ARN number
• Any evidence to show Chargeback was raised before the date of agreed refund
• Cancelled Recurring Transaction
• Evidence of Subscription Terms and Conditions
• Proof that customer did not cancel the subscription

Transparency and speed of action are probably the two most significant lessons here. Ensuring users are aware, at all times, when, how and why they are being charged and (if) something goes wrong, the speed at with you rectify the situation. Thinking about this, and baking this in to your process early, should enable you to have the tools to fight chargebacks, should they occur. More importantly, having these measures/data points in place, should result in fewer chargebacks being raised in the first place.

Users want to checkout quickly, especially if signing up at a SaaS product, they are most likely keen to get in and use the product. It is a fine balance between bombarding them with too much details during sign up/checkout but equally doing enough to reduce your risk of fraud/chargebacks. With that in mind, below are the items you should not compromise on, where possible:

• Clear billing description on the bank statement / transaction list for customers
• 3DS enabled (where applicable)
• Make it clear and obvious on the website / platform that a consumer is entering into a subscription
• Clear terms and conditions / detailed on the website showing exactly what subscription terms are being entered into
• Do not charge the consumer earlier than the expected billing date
• Do not fulfil where IP address might be coming from a sanctioned country
• If order/subscription is cancelled: confirm and inform customer of the process
• When required, refund back to the card of the original source in a timely manner
• Full contact details available for consumers and fully trained customer support staff to support consumer queries

By having the above, you are giving full transparency to the users, giving them options to validate the transaction/sign up and also routes to support. This gives you a basic suite of evidence should the user go on to raise a chargeback.

This may seem like a lot but if the user was never going to legitimately use your SaasS platform, ask yourself the question:

• Would you rather have slightly lower sign up rate but reduced churn/chargebacks or the other way around?

Keeping track of all of the tiny details that may or may not cause a chargeback to be raised can be overwhelming for entrepreneurs, especially when you consider this is one of multiple activities needed to run a successful business. On the other hand, the risk of getting hit with disputes can make or break a company. That’s why we’re building ChargebackStop.com. We want to let you focus on providing value to your customers, not worrying if bad actors take down your payment channels.