CardFlex: How to Prevent Credit Card Chargebacks in Your Business

Although not all credit card chargebacks can be avoided, merchants can take extra precaution to avoid chargeback notices from a credit card processing company.

Costa Mesa, CA, February 06, 2013 --( CardFlex (, a leading credit card processing company, notes that with all of the consumer fraud and protection technologies put into place, merchants often feel like their interests have been neglected when it comes to credit card chargebacks. When a consumer falls victim to credit card fraud, the merchant is usually the one who suffers. After all, consumers are well protected from credit card fraud. The more merchants know about credit card processing procedures, the better protected they are against credit card chargebacks. The good news is that there are many times when a chargeback isn’t the fault of the merchant.

Preventative Measures
As a merchant, there are many preventative measures you can take to avoid credit card chargebacks:

· During payment processing, hold on to the physical credit/debit card and examine it. Verify that the expiration date is accurate and compare the signature on the back of the card to the one on the customer-signed receipt.
· Always get a magnetic stripe reading of credit cards in your business and make sure the cardholder signs for his or her purchase.
· Never process a transaction where the authorization request was denied.
· Don’t repeat processing on a declined request.
· Make sure all printed receipts are legible by replacing printer paper, cartridges, and ribbons regularly.
· Don’t enter transactions multiple times.
· Disclose refund and return policies at the time of purchase.
· Deposit payments in a timely fashion.
· Respond to any retrieval requests quickly.
· Use the Address Verification Service, Card Verification Value, Card Verification Value 2, and Card Identification for card-not-present transactions before accepting payment.
· Never accept expired credit cards.

Preventing Disputes
Although not all credit card chargebacks can be avoided, you can take extra precaution to avoid chargeback notices from a credit card processing company. These precautions include:

· Providing visible customer service contact information to customers so they can contact you directly for any disputes
· Specifying your shipping, return, and refund policies on your receipts in-store and on your website to avoid any confusion
· Making sure your company name and information is stated on a customer’s bank statement, as a common reason for credit card chargebacks is that the customer doesn’t recognize the name printed on his or her bank statement—even if it is legitimate
· Never shipping to an address that does not correspond with the card’s billing address
· Sending a confirmation email for all online and over-the-phone transactions
· Placing fraudulent notices and policies on your website to discourage fraudulent cardholders from using your site

Understand Your Reason Codes
As a merchant, you are provided with rejection reasons when you try to process a card. Don’t ignore these rejections. Instead, familiarize yourself with the reason behind the rejection and work to resolve it. Common reason codes for credit card chargebacks include:

· Reason Code 08 – No Authorization: The issuer did not authorize the transaction. Show the denial to the customer and never process a transaction without authorization.
· Reason Code 75/63 – Cardholder Doesn’t Recognize the Transaction: The cardholder doesn’t recognize your company name on his or her bank statement. Avoid this by using a recognizable name. Present proof of purchase and the customer signature to avoid a credit card chargeback.
· Reason Code 34/82 – Duplicate Processing: The transaction has already been submitted once. Enter payment transactions once and avoid entering them again.
· Reason Code 61/UA30 – Fraudulent Card-Not-Present Transaction: The card was used fraudulently over the phone or online. Always follow the proper card-not-present procedures to avoid this, and never use a card that doesn’t meet verification specifications.
· Reason Code 79/01/TF – Card Issuer Doesn’t Have Requested Copy: The retrieval request wasn’t fulfilled in time. If you do not respond to retrieval requests in a timely manner you run the risk of credit card chargebacks.
· Reason Code 37/UA – Fraudulent Transaction: The cardholder has disputed the charge and stated it is a fraudulent charge. Provide a copy of any signed receipts and include proof the card was present at the time of purchase to dispute back. Always obtain a copy of the card and signature for disputes.

As a merchant it’s important to be proactive to protect your business from credit card chargebacks. If you take the necessary preventative measures to avoid disputes, you can minimize extra processing fees and credit card fraud. Learn more about preventing credit card chargebacks form the credit card processing experts at CardFlex by visiting or calling 866.634.3044.


Andy Phillips is the president and CEO of CardFlex, a leading provider of innovative merchant processing services and prepaid card solutions. A 28-year veteran of the payment processing industry, Andy leads the CardFlex team to help businesses of all types and sizes in a wide variety of industries reduce costs, increase sales, and better serve their customers with customized merchant processing services. CardFlex also provides an elite suite of prepaid card products that enable businesses to automate their payroll systems, significantly reduce costs, simplify reconciliation, improve employee satisfaction, and even create loyalty programs to increase revenues. Learn more about CardFlex’s merchant processing and prepaid solutions by visiting or calling 866.634.3044.
Scott Siders