Handling Chargebacks

A chargeback occurs when a customer asks their credit card company to reverse a charge and refund their money. This article explains what a chargeback is, how to reduce the likelihood of chargebacks, and how to respond when one occurs.

What a Chargeback Is

A chargeback occurs when a customer requests that their credit card company reverse a charge and return their money. This can happen for legitimate reasons, such as a card number being stolen and used without the cardholder's consent. Chargebacks can also occur when a customer believes they are owed a refund that the merchant did not provide, which may happen if the merchant does not respond to a refund request or does not consider the customer eligible for one. For how refunds are issued, see Processing and Calculating Refunds.

How to Reduce Chargebacks

The most effective step is to make the restaurant easy to reach. Customers often reply to confirmation emails when they have an issue or want a refund, so the email address used to send Direct Ordering confirmation emails should be monitored. The sender address and the content of confirmation emails can be changed in the Direct Ordering Admin Panel under Settings > Email Confirmations. A clearly listed contact form or contact information on the website also helps.

How to Respond to a Chargeback

When a chargeback arrives from the credit card processor, contact the customer to understand the reason. A customer may have reported the charge as fraudulent to their card provider rather than requesting a refund directly, often because they could not reach the restaurant. Reaching out can resolve many of these cases.

If the customer cannot be reached, dispute the chargeback to recover the funds. A dispute requires showing the payment processor that the order was delivered and accepted and that the customer did not attempt to request a refund first, or explaining why a refund request was declined. Contact the processor directly to confirm what evidence is required. The Direct Ordering email confirmation or printable order summary is a good starting point to show the purchase was legitimate, and proof of delivery or acceptance helps as well.