If a cardholder is unhappy with the goods or services they have received, or they suspect a transaction to be fraudulent, they can raise a chargeback with their bank. Their bank will automatically refund the transaction amount.
Why do chargebacks occur? #
There are a number of reasons why chargebacks occur:
- A suspected fraudulent transaction
- The goods or services provided were not as described, were defective, or were not received
- The card was not valid at the time of the transaction (this could be before the valid date or after the expiry date)
- Authorisation was not obtained.
How can you protect yourself? #
- Always use the most secure payment method possible when processing a transaction.
- Read our advice on how to safeguard your business against fraud. This includes advice on checking the card and the transaction, and what to do for Card Not Present (CNP) transactions.
- It’s really important to keep a record of your card transactions. A chargeback can be requested up to 180 days from your last interaction with the cardholder, and 540 days since the original transaction. We recommend retaining sales and refund receipts, making sure they’re stored securely.
- Receipts should be kept in a secure area, with a limited number of employees able to access the information.
- Store only essential information about the customer, e.g name, account number and expiry date.
- You must not store any of the following:
- Card Security Code (CSC)
- Full contents of any data from the magnetic strip or chip.