The concept of accepting credit cards as a mode of payment really seems quite promising for business transactions. Apart from improving your productivity, you may even increase your customer database and revenue. You’re developing a professional image for your business besides making things more economical and convenient for your end users. Processing credit cards can often seem a bit complex and you’ll feel it once you’ve taken the big leap. There are a number of things that you need to study and remember. It’s fairly easy to move through the entire process with time, but charge-backs are always a crucial aspect of merchant accounts that you need to consider.
What is a chargeback?
Issuing banks are banks organizations that provide credit cards to customers. A chargeback or reversal is even described as a kind of protection that the issuing banks provide to their customers or cardholders. It provides cardholders an opportunity to register their complaints mentioning fraudulent transactions that they come across in their statements. The complaint is investigated by the issuing bank after the cardholder files his dispute.
The cardholder is supposed to get the original value of his transaction refunded when it’s actually proven to be fraudulent. From the point of view of a merchant, the full transaction value and an extra fee are likely to be charged by the bank when you can’t prove the legitimacy of a transaction. According to the merchant bank that sponsors your account, the value of the chargeback fee might vary between $0 and $100.
The merchant isn’t supposed to request any refund if the complaint filed by the cardholder is found to be untrue. However, he can charge the processing fees associated with such transactions. It is in your best interest not to indulge in chargebacks.