How to Reduce Credit Card Chargebacks
By Jocelyn Chavez
When a creditor charges a customer's credit card, the customer has
the right to dispute any unauthorized or disputed transactions billed
to their cards. When there is a dispute, the bank will ask the creditor
to provide the signed sales slip or card imprint, etc. One question
that comes up from time to time is this: When you take a verbal authorization
to bill a customer's credit card [as many creditors do], how can
you prove the customer authorized the charge?
To avoid any problems with 'verbal' approvals, I require my clients
to sign a written authorization (on my form) to bill their credit
card. I then enter it as a telephone mail order transaction, which
indicates I didn't have the card in my possession on the Visa, American
Express or Master Card authorization log.
I do occasionally get a chargeback dispute from a credit card company.
However each time I have provided the signed credit card authorization
the chargeback was reversed. Here is the form I have created:
In our many efforts to provide better service, we at <insert
company name here> offer the convenience of paying for purchases
and / or invoice(s) with your Visa, MasterCard or American Express.
If your intention is to use a charge card, we require the following
information to ensure that we are not held liable for any unauthorized
transactions or charges. We would appreciate you completing the sections
listed below and faxing the completed form to our office at the number
<insert user name>
Credit / Collection Manager
I authorize <company name> to bill my Visa, MasterCard or
American Express for $_________ on this day ________________ (today's
Charge card number
Name on Charge card / Credit card:
Billing address on Charge card / Credit card:
Street Address City State Zip code
Person Authorizing Charge [Please Print Name]
Signature of Authorization:
[Note: The Signer must be the Cardholder or authorized signer on card.]
PO / Invoice #____________
* If you are prepaying a purchase the total amount charged includes
product, tax and shipping charges unless your purchase is shipped
In the event of a dispute, I agree to contact <company name> to
try to resolve the dispute prior to contacting my credit card company.
The author, Jocelyn Chavez is Credit Manager for an outdoor
furnishings company located in Southern California.
Reprinted with permission from the Covering
Credit Newsletter 4/14/03 Edition