Your Frequently Asked Questions (FAQ)
A retrieval request is simply a request by the bank for information to support the transaction. The bank wants to see legible copies of the actual sales ticket/invoice, and the transaction authorization. American Express calls these requests “inquiries” while Visa, MasterCard, and Discover use the label “retrieval.” Some banks call them “soft chargebacks.” Merchants need to reply to retrieval requests by providing the requested information to the bank to avoid “potential chargeback.”
Chargeback is a forced transaction reversal initiated by the cardholder’s bank. It occurs when a cardholder requests a refund for a transaction directly from their issuing bank. Consumers may declare the transaction illegitimate, because the goods weren’t delivered or weren’t as advertised or arrived damaged, and they demand their money back. The issuing bank supports the cardholder and contacts the merchant’s bank to put a hold on transaction funds. The cardholder receives a refund, and the merchant receives a penalty in for form of a chargeback fee. Merchants can dispute chargebacks by providing transaction records, shipment records, proof of delivery, copies of any correspondence with the consumer, and proof of money transfer.
What is a chargeback cycle?
The Cardholder files a chargeback
The issuer reviews and assigns a reason code to the case
The issuer investigates and take action
The acquirer reviews the chargeback and takes action
The merchant reviews the chargeback and takes action
The acquirer re-presents the chargebacks
The issuer reviews the evidence and makes a final decision
Offer a refund if you believe the consumer may win a dispute. Refund is always better than a chargeback.
For a card-present environment, always capture a signed receipt with a full description of goods or services provided. Keeping good record will prove useful and valuable in the chargeback arbitration.
For a card-not-present environment, always check for fraud. Many chargebacks are caused by fraud. Set your AVS and CVV filters for better security.
Train your employees. Good training includes teaching them fraud and chargeback prevention techniques, such as looking for suspicious transactions, verifying signatures in card-present transactions, and obtaining signatures on contract and sales orders when appropriate.
Fight back when it makes sense. Each chargeback could cost you an additional fee. In addition, if you have a significant number of chargeback, it could hurt your relationship with your merchant account provider. Your merchant account may be terminated by “excessive chargebacks.” You may not choose to devote the time and resources to fighting every chargeback, but if you believe you could win a case, it may be worth pursuing.