Why the Heck Did You Dispute that Credit Card Charge?
The story sort of starts off something like this... There I was, reconciling my previous day's credit card batch over a cup of morning coffee when I noticed something strange. Much to my surprise, $500 had magically disappeared from my batch total; seemingly out of nowhere! It was early, so of course my mind starting jumping to conclusions. Had my fourth grade math skills failed me? Did a hacker somehow get into my bank account and withdraw the money? Did my boyfriend up and purchase the latest iPad despite my non-approval?
Well, no. It wasn't any of those things. After I exhausted all of my other resources—including a less-than-pleasant call to my boyfriend—I called my credit card merchant and was informed that one of my customers who had placed a $500 order for mugs disputed the credit card charge!
At this point I'm thinking, "OK, but that customer never said anything to me. Why the heck are they disputing that credit card charge and how do I fix it?"
Distributors, if you've ever found yourself in this position, you're going to want to keep reading (and if you haven't, still keep on reading because it can happen to you!). The below is a guide that shares what steps I took to get to the bottom of this in addition to some crucial tips that I learned along the way!
For starters, the person on the other end of the phone advised me that they were waiting for our formal response and that I had until tomorrow to respond. That's right... It turns out credit card disputes have a certain deadline that you must respond by, and if you don't, the customer wins by default (regardless of the merit of their claim). Keeping this in mind, I knew I needed to get working on a response ASAP.
Customers can dispute a credit card charge for any number of reasons. Sometimes the bank or your credit card merchant can you tell how or why the customer disputed the charge, but often times the information or the reason codes provided are as beneficial as bringing a knife to a gun fight. So now you might be wondering... What did I do next?
Sometimes the best and only way to get down to business is to call and speak with the person directly responsible for placing the order. In my experience you'd be amazed by the reasons why a customer might dispute a credit card charge. Sometimes it's something innocent, like maybe the person in their billing department wasn't aware of the order or was not familiar with your company name as it appeared on their credit card statement, so they disputed the charge under the assumption that it was fraudulent. This happens more than you think. These disputes are often the easiest to solve, as all it takes is a phone call from the customer to their bank to explain the mix-up and the matter will often be instantly closed in the distributor's favor.
Any way you slice it, $500.00 is a lot of green, and I had to get to the bottom of this. So I gave my client a phone call, devoting my full attention while providing the customer a chance to tell their side of the story. I made sure to do more listening than talking, I was patient, and despite my frustration, I didn't lose my cool. As it turned out, of the 350 mugs that my customer ordered, half of them arrived broken. For whatever reason, instead of contacting me to reach a solution, she simply disputed the credit card charge.
Lucky for me (sort of!), the broken mugs were the result of factory error (lack of proper packaging), so all I had to do was open a claim with the factory, return the order to them, and they reprinted the items for my customer the very next day. Easy peasy.
I wasn't done yet, though. Now that I had made the customer happy, there's still that small matter concerning the $500.00 I was missing. The next day I followed up with my credit card merchant about the disputed charge to make sure they knew the problem had been resolved and that the customer had done the same. I then diligently watched my bank account to make sure the refunded money and any accrued fees had been returned to me.
PRO TIP: In all cases, despite the customer and the bank confirming the matter has been resolved over the phone, it doesn't hurt to fax an explanation or documentation to the fax number provided by your credit card merchant just in case someone somewhere drops the ball. At least this way you're covered.
Now, I hate to break it to you, but your solution won't always be as easy as the example above. Regardless, it's your job as a distributor—and one whose hard-earned money is on the line, no less—to try your hardest to find an immediate solution to the problem at hand. In more difficult cases, you must be willing to sacrifice profit and just settle for breaking even on the order.
"But I don't wannaaa," I hear you sales reps shouting. Just hear me out. You've got to look at it this way: losing the credit card dispute will result in a much bigger loss, and once you lose it's not like you can go charging that customer's credit card again for the same charge, so it's often best to do everything in your power to make the customer happy, even if it means simply breaking even.
Now you're probably thinking, "OK, I get it, take care of the customer. But what do I do when everything did go according to plan, and the customer just doesn't want to pay for the order any longer?" Maybe a marketing coordinator placed the order for the company, and upper management decided they didn't want the items. Maybe your customer was lazy when signing proofs, and even though they signed off on everything, the items aren't what they had in mind (it's situations like these where a rock-solid approval process is worth its weight in gold!). Or maybe they're just jerks.
Remember how I said the only way to find out for sure was to get a hold of the client? Well, it's likely that if a client is simply trying to avoid paying for the items they are also going to be ignoring your calls. In these rare cases, the burden now falls on you to start gathering the evidence and preparing a formal written response to the customer's dispute. Don't forget about that pesky deadline—if you have tried and failed to contact the customer, you still have to act swiftly.
Distributors beware! Before you get started preparing your formal response, especially if this is your first credit card dispute, you're going to want to review your credit card merchant agreement to make sure that you even have the option to issue a rebuttal to the dispute. If your current merchant agreement does not allow you a rebuttal, you probably want to change that, and here's why: if you aren't allowed a rebuttal, your customers could be making off with disputed charges scot-free. That means you could be losing thousands of dollars each year without even knowing it or having the ability to do anything about it!
If you do have the option for rebuttal in your merchant agreement, your next step is to share your side of the story with the credit card company via a written rebuttal. There are a few things to keep in mind when preparing this document:
- Think of this rebuttal as a court case. Rather than presenting a "he-said-she-said" account of the situation, stick to the cold hard facts.
- Always provide the necessary signed documents that are 100 percent pertinent to the case (a UPS tracking number confirming when and where the order is delivered is VERY helpful here).
- The customer will see your response, so be sure to leave out any emotional rhetoric and keep your rebuttal professional.
- Always follow up the day after you have submitted your rebuttal to make sure it is submitted before the deadline.
Sometimes credit card disputes can take months to resolve. Often the credit card company will send an update in a few weeks after your rebuttal, but if you don't hear back from them before then, be sure to check in with them periodically for updates. Rest easy however—as long as you crossed your T's and dotted your I's on all proofs and approvals, the credit card company will likely rule in your favor. If you're concerned they won't, you might want to review your policies and procedures in an effort to shore things up.
Again, once the dispute is settled and ruled in your favor, double-check that all of your money (including fees) has been returned. Finally, just because the credit card merchant ruled in your favor this time, doesn't mean that same customer can't issue another dispute under a different claim. So be on your guard!
The bottom line is that either the dispute is your company's fault or it isn't. If your company is to blame, it's your responsibility to rectify the situation and satisfy the customer as quickly as possible. If nothing went wrong on your end, submitting a rebuttal to the credit card company should take care of the problem! Remember, every credit card dispute is an attack on your hard-earned money, so whatever you do, don't go down without a fight.
Has this happened to you? How did you deal with it? Have any other tips to add? Sound off in the comments below!
Jenna Markowski is a blogger for Quality Logo Products , a leading promotional products distributor. She loves pop punk, graphic novels, and way too many TV shows. You can reach her at firstname.lastname@example.org.
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The opinions expressed here are solely those of the contributor and do not necessarily represent the positions of Promo Marketing, its staff or its publisher.