Protecting Against Chargebacks

Welcome to our Help Center guide on protecting against chargebacks. Chargebacks occur when a customer disputes a transaction with their bank or credit card issuer, resulting in a reversal of funds from the merchant's account. Chargebacks can have significant financial implications and operational challenges for businesses. In this guide, we'll explore strategies to help you prevent and mitigate chargebacks effectively.

Understanding Chargebacks:

Before diving into prevention strategies, it's essential to understand the common reasons why chargebacks occur:

  1. Fraudulent Transactions: A customer claims they didn't authorize or recognize a transaction, indicating potential fraudulent activity.

  2. Customer Dissatisfaction: Customers may dispute a transaction due to issues such as product dissatisfaction, delivery delays, or misrepresentation of goods or services.

  3. Billing Errors: Errors in billing or discrepancies in the transaction details can lead customers to initiate chargebacks.

  4. Processing Issues: Technical glitches or mistakes during transaction processing can result in chargebacks.

Commonalities in fraudulent transactions

Fraudulent transactions are hard to detect if done well, however there are some things we notice that can help you identify potential fraudulent transactions

  1. High amount of cards on file: Fraudsters tend to attempt a number of different cards, and rotate between them if they are unsuccessful -  you should be weary of customers who have a lot of cards on file - or customers who rotate between cards between invoices
  2. Multiple failed transactions prior to a successful one - Related to above, fraudsters will often test the water with cards, and you will receive an increased amount of declines prior to a successful one. You should monitor declines and proceed with caution on customers who have a lot of declines.
  3. International IP addresses: This functionality is only available on Docket Pro, and for transactions originating from Docketshop -  but you can use IP monitoring to track where orders come from - if they are outside your local area, proceed with caution.
  4. Large ticket items with quick delivery dates - Fraudsters will often purchase large jobs with a quick turn around, believing that businesses will focus on the opportunity not the risk. If this is a first time customer, ordering a large job with a quick turn around time - proceed with caution
  5. High number of transactions on a single card - Review your transactions regularly, if you notice a customer paying multiple invoices on the same card - if you notice this, proceed with caution. Large corporate accounts usually do this, if not paying a statement invoice - it is not a guarantee of fraud.
  6. Unusual billing practices - Fraudsters will often set up networks for people to take advantage of their fraudulent card. If you learn about customers venmo-ing or giving cash to an individual, and having that individual pay for the service on card, this is a big red flag.

Non of these things necessitate fraud -  however they should be considered a red flag, and as such you should review the communication and transactions in these situations - if something feels off, it is best to proceed with caution and request a different payment method - ideally cash or check, particularly for first time customers.


Questions to ask a suspicious customer
If you're team is working with a customer, and they have some suspicions - the best defense is to train your team to suss out the fraud. These will not guarantee there is no fraud, but how they react could make it more obvious

  1. When confirming the address -  ask for directions from a common landmark in the local area to see how they react
  2. When confirming the address - ask a red herring question to see if they actually know the area. Use a well known brand that does not operate in your locality to see if they push back. E.g. "Oh, you're right next to the Walmart, right?" If there are no Walmarts in your town.
  3. Talk about recent weather - During the conversation, reference a weather event that never happened to see if they catch it. E.g. "How much snow did you get from the blizzard last night?"
  4. If you have suspicions on a card transaction, offer to meet up with them in person to review the card prior to doing the job - explain that this is to protect your customers from fraud. If they refuse to meet, and you have suspicions, proceed with caution and consider requesting a different payment method than card.

Fraud can be hard to protect against, but sometimes questions like these can catch the fraudsters out in their lie.


Prevention Strategies:

  1. Clear and Transparent Policies: Establish clear and transparent refund, return, and cancellation policies. Ensure that these policies are prominently displayed on your website, invoices, and receipts. Clear policies can help manage customer expectations and reduce the likelihood of disputes.

  2. Accurate Product Descriptions: Provide accurate and detailed descriptions of your products or services to avoid customer confusion or misrepresentation claims.

  3. Secure Payment Processing: Implement secure payment processing systems and comply with Payment Card Industry Data Security Standard (PCI DSS) requirements to safeguard customer payment information from potential breaches and fraud.

  4. Authentication and Verification: Use advanced authentication and verification measures, such as address verification service (AVS), and card security codes (CVV/CVC), to verify the identity of customers and prevent fraudulent transactions.
    By default, Zip code verification and CVV verification are enabled, you can chose to enable full address verification if you would like - please contact our support at to learn more

  5. Prompt Customer Service: Provide prompt and responsive customer service to address customer inquiries, concerns, and complaints efficiently. Timely resolution of customer issues can prevent escalations to chargebacks.

  6. Transaction Monitoring: Regularly monitor transactions for unusual patterns or suspicious activity that may indicate fraudulent behavior. Implement fraud detection tools and systems to identify and mitigate potential risks proactively.

  7. Documentation and Records: Maintain detailed transaction records, including order information, shipping details, customer communications, and proof of delivery. Comprehensive documentation can provide evidence to dispute invalid chargeback claims effectively.


Mitigation Strategies:

Despite preventive measures, chargebacks may still occur. In such cases, it's crucial to respond promptly and effectively to minimize the impact on your business:

  1. Review and Respond: Thoroughly review chargeback notifications and respond within the specified time frame with compelling evidence to support your case. Provide relevant documentation, transaction records, and evidence of customer authorization or delivery.

  2. Dispute Invalid Claims: If you believe a chargeback is unjustified or fraudulent, follow the dispute resolution process provided by your payment processor or acquiring bank. Present persuasive evidence to challenge the chargeback and advocate for a favorable outcome.

  3. Continuous Improvement: Continuously evaluate your business processes, customer interactions, and payment procedures to identify areas for improvement and implement corrective measures to reduce chargeback rates over time

By implementing proactive prevention strategies and effective mitigation tactics, businesses can minimize the risk of chargebacks and protect their financial interests. Remember to stay vigilant, maintain transparent communication with customers, and prioritize fraud prevention and customer satisfaction to build trust and loyalty.

If you have any further questions or require assistance with chargeback prevention and management, don't hesitate to reach out to our customer support team. We're here to help you navigate the complexities of payment disputes and safeguard your business interests.



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