Business, Finances

The Top 5 Chargeback Reasons and How to Avoid Them

If you’re a business that accepts credit card payments, chargebacks are one of the most frustrating aspects of the process. Not only do they eat into your profits, but they also take up a lot of time and energy to resolve.

Thankfully, there are many things you can do to stop chargebacks from happening in the first place. This article will look at the top 5 reasons consumers often file chargebacks and how to avoid them in the future.


Fraud is a deliberate act of deceit or false representation designed to gain an unlawful or unethical benefit for one person or institution at the expense of another. Finding the culprit may prove to be really difficult, especially if they want to stay away from prying eyes. That’s why businesses employ the services of a third party, such as Bond Rees or similar companies, to help them find the wanted individual. With their advanced technology and trained professionals, they will be able to find anyone you are looking for, which is especially important when it comes to fraud. 
There are many different types of fraud, and they include credit card, tax, wire, securities, and bankruptcy fraud. It is an important and costly crime costing the economy billions of dollars yearly.

Fraud is a complex and difficult problem for merchants, but it can be eliminated with comprehensive fraud prevention solutions. A subscription billing fraud solution that identifies good products assesses transaction risks, and prevents friendly fraud can help reduce chargebacks per authorization from criminal fraud and increase revenue.

Defective Products

A defective product can have serious ramifications for your business, including customer loss, lost revenue, and a bad reputation. To prevent this, strict testing and inspection guidelines for all your products must be implemented.

Many manufacturing defects, including contamination, poor materials, and missing components, can occur. Luckily, our legal system protects consumers from dangerous and defective products.

Defective products can cause burns, cuts, amputations, and brain trauma. To prove a defective product claim, you must first prove that the product had a defect and was unreasonably dangerous for use or consumption.

Recurring Charges

Recurring charges are a common way for businesses to get recurring customer payments. They’re often used for subscriptions, gym memberships, cable bills, and other goods and services that consumers will automatically pay for regularly.

A chargeback dispute can frustrate businesses and their customers, but there are ways to avoid them. For example, if you’re offering a free trial period, let customers know when their free trials will end.

Other times, customers may have legitimate issues with your products or services, resulting in them disputing charges. This can happen for reasons such as poor customer service, data entry errors, fulfillment issues, or shipping and handling gaffs.

Unsatisfactory Customer Service

Poor customer service can result in an unhappy customer and a loss of trust in your business. This will have a negative impact on your sales and revenue.

A bad customer service experience can also lead to customers not re-visiting your website or calling your customer support line again. Moreover, dissatisfied customers can spread their problems to their friends or family and even on social media, affecting your business reputation.

Long wait times on the phone are another common issue that leads to unsatisfactory customer service. A solution to this problem is to offer multiple communication channels so that your customer can contact you in a manner that suits them best.

Mistaken Identity

The top 5 chargeback reasons are fraud, defective products, recurring charges, unsatisfactory customer service, and missteps on the merchant’s part that inadvertently trigger a dispute.

Whether it’s a product being delivered that doesn’t match the image on the seller’s website or a mistake in data entry, these chargeback reasons can be tricky to overcome.

A good chargeback defense strategy can prevent these problems from occurring in the first place. For example, ensure customers know that if they don’t receive what they ordered, they should contact you immediately instead of attempting to dispute their purchase online.