Know that chargeback is a complicated matter, and also that each case is different from another. Here are some of the most frequently asked questions on chargebacks.

What do I do with a Chargeback Notification?
A chargeback notification simply tells you that your account has been debited for a particular transaction. It should display information about why such an amount was debited from your account. You should read the notice carefully, then decide whether it is correct. If it is not, you should immediately send the notification to the financial institution, along with your supporting documentation. If the issuing bank sees that your rebuttal is sufficient, the chargeback will be reserved and the amount will be credited back to your account.

What do I do with a retrieval request?
When you receive a retrieval request, immediately gather all of your supporting information related to the transaction being questioned, and then you can fax or send it to the credit card processor.

Why is the chargeback taken from my regular checking account and not from my reserve account?
Remember that your reserve amount is set only for security purposes and to protect you, as merchant, from losses caused by chargebacks. A chargeback is usually taken out of your regular checking account.

How will I know if the chargeback has already been deducted from my account?
You will usually be sent be a Notification of Chargeback as soon as the debit is sent to your bank. The debit of this amount from your checking account will usually take about 2-4 days.

Why was there a chargeback issued to my buyer without a retrieval request being sent to me?
Note that not all chargebacks require that the cardholder bank send a retrieval request before a chargeback is initiated. Chargebacks that are obviously deserved by the cardholder will be automatically issued without consulting you, mainly because no consultation is needed.

Will I be charged for these chargebacks? How much?
When the credit card institution initiates a chargeback, expect it to immediately be charged to your account. Typically, you should allot anywhere from $10 to $25 for every chargeback filed. This fee will cover all of the processing expenses. Reversing a chargeback in your favour, on the other hand, will not cost anything.

How many chargebacks am I allowed a month?
When it comes to chargebacks, there is a certain limit provided by the bank, which varies from one bank to another. The chargeback ratio is the ratio between the number of chargebacks to the number of transactions you have. The maximum ratio that a merchant should have is probably 2.5% or less. If you happen to go beyond this limit, there is a good chance that your merchant account will be closed.

Don't credit card processors protect merchants from chargebacks?
Yes, there are some processors who do have measures to protect merchants from chargebacks. However, the fact of the matter is that it is the merchant who becomes solely responsible for chargebacks.

How long does this entire process take?
The duration of the chargeback process depends on the reason why the chargeback was filed. It can last anywhere from a month to about six months.

What will happen after a chargeback?
Once a chargeback is filed, the amount to be reimbursed will be taken from your account, plus the processing fees. If you provide enough documentation to show that the customer did not deserve the chargeback, then the amount taken from your account will be reimbursed.

What is the first thing I have to do when I receive a chargeback?
The best first step after receiving a chargeback is to contact your customer about their concerns. If both parties are amenable to coming to a mutually agreeable solution, then you would avoid going through the usual chargeback process.

How can I be protected from chargebacks?
There is no simple answer to this question. This is because there are just too many ways that you can avoid chargebacks. The rest of the eBook summarizes most of the preventive measures available to date.