• Business Law, Small Business Law

    Posted on July 6th, 2010

    Written by Bryan

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    Recently I helped a client recover about $700 from American Express after a disgruntled customer submitted chargeback requests with American Express.

    Only a few weeks later, the customer has resubmitted their dispute with American Express and now we have been forced to respond again.

    Here are a few points I have learned during this process:

    1. Don’t just write-off a chargeback request. If the sale was legitimate, you can keep the funds, though the chargeback process requires some time and patience. Also, if you accumulate chargebacks your agreement with the credit card company may be negatively impacted.
    2. Deadlines are important. Be careful to watch the deadlines for responding to the requests. The easiest way for a credit card company to dispose of these complaints is for the merchant to fail to respond to a request. If the deadline passes without response, you may not have any recourse against the credit card company.
    3. Respond thoroughly but carefully. Consumers may not provide more than one or two sentences in their complaint and if you, the merchant, can thoroughly document the transaction and a valid sale the credit card company is more likely to side with you. However, be careful when you respond because any statements you make or documents you provide will be sent to the customer, and can be used against you in any future court action. If you believe the dispute may lead to a future court or administrative action you should take that into consideration when choosing how to respond. Your attorney can help you choose how to respond in these cases.
    4. Don’t take no for an answer. If your request to overturn a chargeback is initially denied, don’t give up. There may be an appeal process, a supervisor, or it may be overturned by writing to the credit card company’s legal department. The departments making chargeback decisions are not necessarily thorough, and they make mistakes, so if at first you don’t succeed, try, try again.
    5. Pick your battles. Some battles are just more trouble than they are worth. Should you hire an attorney to dispute a $5 chargeback request? Maybe not, so consider the amount of time and effort that has to go into responding, however, if you aren’t going to dispute the request, try to voluntarily resolve the dispute instead of permitting the chargeback to stand. A chargeback may hurt your relationship with the credit card company, but a voluntary refund probably won’t, or won’t have as significant an impact.

    Finally, if you are experiencing a high number of chargeback requests, you need to look at y our business practices and work with your staff to reduce the number of requests. Sometimes this can be done by (1) improving the compliance during the sale, or (2) improving the response to disgruntled customers. Your attorney can help you to analyze your business practices to reduce the risk of chargebacks.

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    This entry was posted on Tuesday, July 6th, 2010 at 3:30 pm and is filed under Business Law, Small Business Law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
  • 1 Comment

    Take a look at some of the responses we have had to this article.

    1. Jan 25th

      Most positive article i have read in my quest to win a chargeback, I provided a service to a customer. Chargebacks hurt more when you provide a service as oppsed to a item.

      Thanks for posting your journey with Amex.

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