Offshore High Risk Merchants
Domestic and International Merchant accounts
No one starts a business to lose money. You work hard for every sale, and every penny is important. But when money is taken back from you months after a sale, it’s not only painful, it’s also bad for business.
Too many chargebacks can even shut down your business.
Shops with physical locations have better tools to avoid chargebacks. They can swipe a customer’s card or take a manual imprint. They also get a signature at the time of the sale. This helps prove that the customer was present and agreed to the purchase.
But online businesses don’t have these options.
If you run an online business, you can’t give up. The best way to fight chargebacks is to prevent them before they happen. This article will help you understand how chargebacks work and how to reduce them.
A chargeback happens when a customer tells their credit card bank they want a refund. This could be because they’re unhappy or feel something went wrong.
Sometimes they contact the seller first, but many times, they don’t. Still, it’s the seller’s job to make sure everything goes right in the sale. A bad experience or slow customer service can lead to a chargeback.
The chargeback process is long and includes many steps. Here is a simple explanation (this process is for Visa and MasterCard):
The customer contacts their bank to dispute a charge.
The bank checks if the reason is valid. If not, they reject the chargeback.
If valid, the bank gives temporary credit to the customer and takes money from the merchant’s bank.
The merchant’s bank checks if the chargeback is valid.
If not valid, the bank fights it and tells the customer’s bank.
The merchant’s account is debited, and the merchant gets a notice.
If it’s a processing error, the sale may be fixed.
The merchant sends proof to fight the chargeback. If the proof is good, the chargeback is rejected. If not, it is accepted and the money is lost.
This process can take 6 weeks to 6 months.
Chargebacks usually happen for 3 main reasons in online businesses:
Incorrect Account Number (Code 36)
The wrong card number was entered.
Fix: Give a refund and try to charge the right card if possible.
Duplicate Charge (Code 82)
The same charge was made twice.
Fix: Give a refund for the extra charge.
Service Not Performed (Code 30)
Customer says the service was never given.
Fix: Send proof the service was done (like a signed contract).
Recurring Billing Canceled (Code 41)
Customer says they canceled but still got charged.
Fix: Refund the customer.
Not as Described (Code 53)
Customer says product/service was not like it was described.
Fix: If the product was returned or service canceled, give a refund. If it wasn’t returned, inform your bank.
Defective Product (Code 56)
Customer says the item was broken or not working.
Fix: If returned and defective, refund. If returned but not broken, tell your bank. If not returned, inform your bank.
Item Not Received (Code 90)
Customer says they never got the product.
Fix: Send delivery proof to your bank.
Unauthorized Transaction (Code 61)
Customer says they didn’t make the purchase.
Fix: Send delivery proof, address verification match, and order approval to your bank.
Chargebacks don’t just take your sale, they cost more:
You lose the money spent on shipping.
If you get too many chargebacks (more than 1–2% of your sales), your account can be closed.
Your business can be blacklisted and won’t be allowed to accept credit cards again.
You also lose time collecting proof and responding to the bank.
The best way to handle chargebacks is to stop them before they happen. Here are some simple tips:
Use a clear name on customer billing statements.
Add your phone number to the statement so customers can call before starting a chargeback.
Always reply quickly to chargebacks.
Never accept expired credit cards.
Get approval for the full amount of the sale.
Help unhappy customers before they go to their bank.
Double-check each batch to avoid double charging.
Call or message to confirm large or strange orders.
Verify the address and phone number with the card issuer.
Always get proof of delivery.
Charge the card only when the item is shipped.
Be careful with rush orders or high-value orders.
Use fraud tools like AVS and CVV2.
Make your return/refund policy clear on your website.
Show clear product pictures and descriptions.
Be very careful with international orders.
Watch out for orders with local billing but international shipping.
Be careful if someone is willing to pay more for fast shipping.
Dealing with chargebacks as an online merchant can be stressful and time-consuming. You work hard for your sales, and losing money due to disputes is frustrating.
At Offshore High Risk Merchants, we understand these challenges. That’s why we help high-risk merchants reduce chargebacks and protect their businesses. Our team is experienced in handling chargebacks and understands the steps needed to prevent and respond to them effectively.
If your business is facing chargeback issues or you simply want to protect yourself before problems happen, we’re here to help.
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