BLESS Chargebacks

Chargeback is the term used for when a customer disputes a transaction on their card with their bank. Customers can initiate chargebacks without ever notifying you, First American Payment Systems or National Merchant Alliance.

First, the cardholder/customer contacts their bank to dispute a specific transaction.

Second, the customer’s bank contacts the appropriate Card Brand (Visa, MasterCard, American Express, or Discover), which then notifies First American and National Merchant Alliance of the chargeback.

Third, First American Payment Systems and National Merchant Alliance will notify you of the chargeback with a mailed letter that includes: the transaction being disputed, the reason for the dispute, and what is needed for the attempt to successfully defend you in this case. You must reply to this letter within 14 days of receiving it. At this time, you will not be charged for the chargeback amount, BUT your account will be debited a $15 fee for the processing of this chargeback case.

Fourth, First American Payment Systems and National Merchant Alliance review the details of the chargeback and the evidence you provided.

Fifth, First American Payment Systems and National Merchant Alliance submit the evidence to the customer’s bank, if possible, in an attempt to reverse the chargeback.

Sixth, after the evidence has been submitted, one of two things will happen, either the customer’s bank rules in your favor and no further action is required or the customer’s bank does not rule in your favor and you may be responsible for the chargeback, meaning you forfeit the disputed amount.

You are charged a $15 fee for First American Payment Systems and National Merchant Alliance to process and defend your chargeback case. You will be charged a $15 fee every time you are hit with a chargeback.

After you receive a mailed letter from National Merchant Alliance and First American Payment Systems, you have 14 days to respond with evidence supporting the transaction in question. Any evidence provided after the 14 days will not be accepted or reviewed.

If you choose not to fight a chargeback, or you do not respond within 14 days of receiving notice of it, you will lose the chargeback. Meaning, you forfeit the transaction amount in question.

The final ruling of a chargeback may not be decided for several weeks or sometimes several months after it is initiated. However, if your account is debited at any point, you will be notified.

The customer’s bank is who decides on the ruling of a chargeback. National Merchant Alliance and First American Payment Systems are only attempting to reverse the chargeback on your behalf – they have no say in the ruling.

Although there’s no guaranteed way to prevent chargebacks, but for a list of practical tips to help avoid them watch our “Best Practices to Avoid Chargebacks” video.

Any evidence that will be needed for First American Payment Systems and National Merchant Alliance’s attempt to reverse the chargeback are stated in the initial notification letter.

Yes, if the customer has a valid dispute with the charge in question and/or you do not provide the necessary documentation within 14 days after receiving the chargeback notification letter. If, however, the customer doesn’t have a valid dispute and you complied with processing regulations, you may not be liable. If the chargeback is found to have been in error, you will be granted a reversal.

You may receive a chargeback if the cardholder does not recognize the transaction or disputes the following:

• Participation in the transaction or sale
• The cardholder’s bank determines the transaction is fraudulent
• Merchandise was inaccurately described
• Delivery or failed delivery of the merchandise
• Failure to follow your refund and/or return policy
• Duplicate transactions were processed
• You force processed a card that got declined

This is not a comprehensive list but contains the most common chargeback reasons.

You are required to locate the signed copy of the transaction receipt, or other requested information, and send a copy of it to First American Payment Systems/National Merchant Alliance within the 14 days allowed. Failure to do so will result in a chargeback due to non-receipt of requested documentation. Your credit card processors may request copies up to three years following the date of sale.

For all transaction types:

• Check the expiration date and do not accept expired cards.
• Obtain authorization for the full amount of the sale.
• If a card is declined, do not continue to get an authorization.
• Include a customer service telephone number in the billing name that appears on your customer’s bank statement.

For Card-Present Transactions:

• Do not accept a card that appears to have been altered.
• Do not accept any cards which have not been signed.
• Verify that the card number and signature on the receipt matches the number and signature on the card.
• If you manually key in a card number, get a manual imprint of the card.
• Return policies must be printed on the sales receipt close to the signature line.
• Be on the lookout for the following suspicious behavior:
  • Customer makes indiscriminate purchases without regard to size, style, color, or price.
  • Customer makes purchases, leaves the establishment, and returns to make additional purchases.
  • Customer hurries you to complete the sale at closing time.
  • Customer refuses free delivery for large items.

For Card-Not-Present Transactions:

• Confirm the customer’s card number and obtain the customer’s signature on an order form.
• Ship goods only to the cardholder’s billing address and obtain a signed proof of delivery from the shipper for delivered goods.
• Never charge a cardholder’s card until the goods have been shipped.
• Pay special attention to international purchases since they have a greater risk of credit card fraud.
• Use security features such as AVS to verify the billing address and ZIP code, and CVV2 to verify that the consumer is in possession of the card.
• Make the warranty and return policies clear on your Web site, in e-mail and other correspondence.

A Retrieval Request is a request for transaction information (such as a sales receipt, invoice, or contract) for a particular secure payment transaction. This can occur when a cardholder does not recognize a transaction on their billing statement or considers the transaction fraudulent. You will receive notification of a retrieval request through a letter in the mail.