How to handle Chargebacks

What is Chargeback?

A chargeback happens when a customer goes to their credit card company and requests that a charge be reversed - that is, they want their money back. This can happen for legitimate reasons if a customer didn't make a purchase themselves for some reason (perhaps their credit card information was stolen and someone else made the purchase).

It can also happen when a customer believes they deserve a refund, but the merchant (i.e., you) is not giving them one. This can happen because the merchant is not responding to their request for a refund (this is why it's essential to make it easy for your customers to contact you), or perhaps the merchant doesn't believe the customer deserves a refund.

How to avoid chargebacks?

In short, make it easy to get in touch with you.

Are you monitoring the email address you're using to send confirmation emails from Direct Ordering? Customers often reply to confirmation emails when they have issues or want refunds for their orders. If needed, you can change the sender’s email addresses and the content of the email confirmations by going to Settings > Email Confirmations in Direct Ordering.

Aside from that, having a contact form or contact information clearly listed on your website is also important.

What to do about it when it happens?

When you receive a chargeback from your credit card processor, you should first contact the customer to figure out why they requested the chargeback. It's quite possible that instead of going to you and requesting a refund, they went directly to their credit card provider and claimed the charge on their card was fraudulent. Customers might do this if they cannot contact a restaurant to request a refund, and credit card companies will honor this request (giving the customer the benefit of the doubt).

So, if you reach out to the customer to determine why they requested the refund, you can often resolve these issues. But if you're unable to reach the customer, you can dispute the chargeback and get your money back.

To do this, you'll need to prove to your payment processor that the order was delivered to and accepted by the customer and that they did not attempt to contact you directly to request a refund (or if they did, why you refused to grant the refund). 

You should contact your credit card processor directly to determine what they need regarding evidence. The Direct Ordering email confirmation or printable order summary is a good place to start - this shows it was a legitimate purchase made by the customer (with their name on it). Any proof of delivery/acceptance of the order would also be helpful, but you should deal with your credit card processor directly to see what else they need.