Chargeback systems are often called responsibility accounting because of the nature of their function. They hold individuals accountable for any IT service expenses charged to a business unit. This way, users feel obligated to cover the expenses or use the services less hastily. In some cases, chargeback fraud can occur and here are some issues to think about in those situations.

Friendly Fraud

Though it bears such a benevolent name, chargeback fraud can cause serious damage. For example, an individual can make an online purchase and use their credit card regularly. However, after the purchase has been made the individual might request a chargeback from the issuing bank. This way the individual will have gotten the purchased goods without paying for it. They will have received a refund long after the goods have been delivered to them.

This occurrence can only damage the merchant. This is why merchants need to be aware of the damage and work on protecting themselves and their business.

Protection and Prevention

Initially, the chargeback system was created to protect the customers. However, today the chargeback system is being exploited for different purposes. It is crucial that chargeback protection for merchants develops a system for tracking frauds.

Chargebacks are made to be user-friendly. Though they are easy to handle they cannot be used without a reason. There are several different “reason codes” for identifying and defining the type of issues with a chargeback. Chargebacks will only go through in these cases:


This chargeback is issued when authorization of a card has expired when there are no sufficient funds, or when the bank makes errors in their system.


The issue with these chargebacks happens with double billing or when an incorrect amount has been charged, and when there a refund was not returned.


Quality chargebacks occur when customers don’t receive the goods, or when they receive damaged goods. This can also occur if the goods are delivered later than expected.

electronic payments card


Friendly frauds happen most often in connection with identity theft or credit card theft.  


Being involved in a chargeback dispute can be draining and complicated. There are a couple of ways to help yourself during this process.

Customer Relations

Always keep your end of the bargain. Inform your customer of every detail they need to know and give out the correct information. If you have a good relationship with your clientele they would come to you first if a problem does occur.


Make your return, refund, and shipping policies clear and accurate. Put them in big print everywhere you can so there will be no confusion.


Be sure to send out confirmation emails regularly. They should have a copy of the invoice and all information pertinent to the transaction. This way they will be able to see shipping and tracking details.

Don’t be afraid to triple check with the customer. Ask for their address and credit card information several times. Make sure that you know what they are ordering and on what day will it arrive. Don’t take chances.