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CNP transactions, such as Mail Order, Telephone Order and Internet transactions, are more prone to chargebacks due to lack of in-person verification options.
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Merchants can add controls to reduce the risk of chargebacks for fraudulent or unauthorized transactions: Maintain a negative Database. Limit the number of transactions by a single cardholder. Use an Address Verification Service (AVS). Employ strategies that will allow you to know your customers. Publish a customer service phone number Use CVV2/CVC2 security features.
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To prevent Credit Not Processed chargebacks, merchants should quickly process refunds to their customers.
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Merchants can take additional steps to reduce the likelihood of Credit “Credit Not Processed Processed” chargebacks: Make customers aware of a cancellation or refund policy in writing. Provide “No Refund” policy on transaction receipt if store credit is only allowed. Always provide refunds to the same card used in the original sale. Never refund a card purchase with cash or check.
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To avoid duplicate transactions that result in Duplicate Processing chargebacks, merchants should carefully review each transaction and settlement batch to try and spot duplicates.
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Merchants can take additional steps to reduce the likelihood of Duplicate Transactions: Process one transaction at a time. Balance deposits at the end of each business day. Create separate, descriptive invoices for each purchase. Check the batch totals at the end of every day to ensure that customers were not charged twice. Immediately credit a cardholder’s account if the customer is charged twice in error.
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If a cardholder does not receive merchandise or services, a Non-receipt of Merchandise chargeback may occur. Goods and services must be delivered before charging the customer.
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Merchants can take steps to reduce the likelihood of Merchandise or Service not received: Create separate, descriptive invoices for each order. Obtain a signed proof of delivery for any merchandise or service not fulfilled at the point of sale.
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Shipped goods should be properly packed. The goods should be suitable for the purpose for which they were sold.
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Merchants can take steps to reduce the likelihood disputes from Merchandise or Service Quality: Make sure merchandise or service descriptions are accurate to what a customer will receive. Make customers aware of a clear return policy and method to return at the time of purchase. Prominently display the return policy on the receipt and website. Maintain and update each return policy regularly. Obtain a signed proof of delivery for any merchandise or service not fulfilled at the point of sale.
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