Chargeback Definitions
Chargeback
Glossary
Step-By-Step Terminologies
Essential Terms
for Key Chargeback Steps
When it comes to disputes and chargebacks, certain terms can be confusing. Not understanding the jargon can cause undue stress. Here we share the most commonly used terms.
Card Issuer
The financial institution that issues the credit card.
Card Present
A sale that occurs when both the cardholder and credit card are present. For example, an in-store purchase.
Card Not Present (CNP)
Transaction that occurs when the cardholder is not present. For example, an online purchase, phone purchase, or mail-in purchase.
Card Present
A sale that occurs when both the cardholder and credit card are present. For example, an in-store purchase.
Card Not Present (CNP)
Transaction that occurs when the cardholder is not present. For example, an online purchase, phone purchase, or mail-in purchase.
A Quick Note from Us:
We haven’t included every known term in this chargebacks glossary—frankly, the list would simply be too long and too cumbersome to read in one stop.
Suggestion: Refer to the documentation provided by your acquiring bank or payment processor for case-specific terminology.
Suggestion: Refer to the documentation provided by your acquiring bank or payment processor for case-specific terminology.
Chargeback Fee
The amount assessed by the acquirer for processing chargebacks.
Chargeback Reason Code
A numerical code which identifies the specific reason for a chargeback. MasterCard and Visa each have their own chargeback codes.
Chargeback Representment
A strictly-regulated process for fighting an invalid payment card chargeback.
Chargeback Reason Code
A numerical code which identifies the specific reason for a chargeback. MasterCard and Visa each have their own chargeback codes.
Chargeback Representment
A strictly-regulated process for fighting an invalid payment card chargeback.
From Our Team: Chargebacks vs. Refunds
Both refunds and chargebacks represent a net loss for merchants. Neither is a target outcome, but refunds are certainly preferable to the costs associated with chargebacks.
Friendly fraudsters may intentionally initiate this, contacting both their bank and the merchant at the same time to begin the chargeback and refund process.
Friendly fraudsters may intentionally initiate this, contacting both their bank and the merchant at the same time to begin the chargeback and refund process.
Encryption
There are various levels of encryption that can be used to securely scramble and protect the cardholder’s identity, card number, address, and location.
Front-End Protection
This is your first line of defense, providing you with immediate notification that a chargeback has been initiated. This gives you the opportunity to act fast to resolve the case before it becomes a chargeback.
Front-End Protection
This is your first line of defense, providing you with immediate notification that a chargeback has been initiated. This gives you the opportunity to act fast to resolve the case before it becomes a chargeback.
The Team of Dispute.com have built technology and experience from managing over $1 Billion
in e-commerce revenue.
Just like every other industry, internet fraud has been benefiting from improvements in technology.
Between the increase in resources and the volatility of the global economic climate, Internet fraud is often shown as a victimless crime in popular media.
We're making our years of experience available to you with Dispute.com.
Between the increase in resources and the volatility of the global economic climate, Internet fraud is often shown as a victimless crime in popular media.
We're making our years of experience available to you with Dispute.com.
Family Fraud
Family fraud is when a family member, often a child, makes a credit card purchase without the knowledge of the primary account holder. These issues can usually be resolved with the merchant, but any chargeback that results is considered friendly fraud.
Team Insight from Dispute.com
The cost of chargebacks is said to have been $117.47 billion by 2023. 86% of chargebacks are probable cases of 'friendly fraud.That amount does not include the additional losses, like the loss of goods or services, as well as the time spent by the merchants' team in processing them.
Identity Theft
When fraudsters use personal data such as an individual’s name, driver’s license number, date of birth and address, to pose as that person to open new accounts and make purchases.
Phishing
A form of social engineering and identity theft in which an e-mail user is tricked into revealing personal or confidential information which the scammer can use illicitly. Phishers may also install malicious software on computers, infect computers with viruses or even steal personal information off computers.
Phishing
A form of social engineering and identity theft in which an e-mail user is tricked into revealing personal or confidential information which the scammer can use illicitly. Phishers may also install malicious software on computers, infect computers with viruses or even steal personal information off computers.
Pro Tip
Should the unfortunate happen, a sound paper trail will help rapid resolutions.
As a matter of course: It’s extremely important that you keep all necessary documentation organized. Transaction records, customer information…all this data needs to be stored in a way that lets you recall it quickly, and at will.
Deconstructing Chargebacks is key.
As a matter of course: It’s extremely important that you keep all necessary documentation organized. Transaction records, customer information…all this data needs to be stored in a way that lets you recall it quickly, and at will.
Deconstructing Chargebacks is key.
Merchant Common Dispute Reasons
Fraud
No Cardholder Authorization
Merchandise/Services Not Received.
Defective/Not as Described.
Canceled Recurring Payment.
Incorrect Amount
Point of Interaction Error.
Canceled Merchandise
Services.Duplicate Payment.
Credit Not Processed.
No Cardholder Authorization
Merchandise/Services Not Received.
Defective/Not as Described.
Canceled Recurring Payment.
Incorrect Amount
Point of Interaction Error.
Canceled Merchandise
Services.Duplicate Payment.
Credit Not Processed.
Pro Tip from Dispute.com
We’ll cut straight to the chase: chargeback reason codes should never be confusing, overwhelming, or frustrating. The key to removing the doubt and confusion around reason codes lies in having easy access to the right information.
Book a Call if confused. Clarity in Chargebacks is key to successfully reclaiming revenue
Book a Call if confused. Clarity in Chargebacks is key to successfully reclaiming revenue
Representment
The process whereby you decide to dispute or fight a chargeback. To effectively represent your case, you must have access to the information provided to you by a proven end-to-end solution.
Pro Tip from Dispute.com
When it comes to finding a solution, there is no smoking gun or universal set of best practices to keep pirates away. Companies will need to learn and re-learn their asset-protection strategies in bits and pieces to minimize losses. We can help.
Arbitration is the last resort
Only 2% of disputes make it to arbitration. Even if you think you have an airtight case, there’s still no guarantee of success. And, if the card network rules in the cardholder’s favor, they might assess a fee totaling hundreds, or even thousands of dollars.
Pro Tip
Only proceed to this stage if the dollar value of the goods or services justify the risk. Then, ask for advice from your acquirer as to the best way to proceed.
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