What are the most common chargeback reasons?

Sometimes, whether the fault of the merchant or not, a customer is not happy with their purchase or cannot recognise a transaction in their bank account. If the issue cannot be resolved with the seller directly, the customer has the right to contact their bank and request an official refund. This is known as a chargeback. Before getting to chargeback reasons, here is a brief introduction to what a chargeback is:

What is a chargeback?

A chargeback is a payment refund officially claimed by a cardholder from their bank or card issuer. Your customer may dispute a card transaction, and the bank may immediately credit the disputed payment amount to the customer’s account. As a merchant, you need to be prepared for the risk of chargebacks.

Check out our blog for more information on what a chargeback is here.

Why does a chargeback occur?

Understanding the causes of chargebacks is the first step in knowing how to avoid them. Sometimes the chargeback can occur due to fraudulent activity, other times it can be down to friendly fraud, and you need to be prepared for all instances.

Here are the most common causes of chargebacks:

• The card was used without the owner’s knowledge or permission;
• The cardholder did not authorise the charge, e.g. the card was stolen;
• The cardholder does not remember or recognise the charge, e.g. the purchase was made by a family member;
• The quality of the item/service was low or the product was damaged;
• The item was not as described;
• The customer did not receive the service/item they paid for;
• The customer unintentionally placed an order several times;
• The subscription was cancelled, but the recurring billing was not stopped;
• Other processing errors.

If your customer files a chargeback, we will receive a notification on your behalf and inform you about it. You can also receive chargeback alerts to get an early notification about a potential dispute; that way you can handle it before it becomes a chargeback to avoid the fees.

If you decide to dispute the chargeback, it's advisable to collect as many details about the disputed order as possible. This way you will get the chance to win the chargeback. Note that it is the customer’s issuing bank who makes the decision.