| A refund that is forced by a cardholder's credit card company is known as Charge back. This occurs when a cardholder decides to formally dispute a charge on his/her credit card bill, usually because someone else fraudulently used that card number. Paysignet's payment gateway service provider, ICICI E-Payments and ICICI bank, has state-of-the-art fraud screening capabilities to reduce risks. However, if any chargeback is reported by the cardholder, you will be liable to pay the amount back to Paysignet or it will be adjusted with the current balance of your account with Paysignet or you will be liable to refund back the disputed amount back to Paysignet. Please note that this practice is universal and is followed by almost all the payment gateway service providers the world over. Paysignet has also an in-house team which will screen all the transactions and in cases which pima facie look fraudulent, the same will be referred back to payment gateway for a further thorough authorization and if it is still authorized then Paysignet will forward the transaction to the Sub Merchant so as to enable him/her to use his/her judgment whether or not he wants to execute the order or not. The Charge back disputes are normally less than 1% of the total transactions in a year.
As per VISA & MASTERCARD rules any online transaction can/may also be revoked or refuted by a customer to a Sub Merchant via his card-issuing bank for the following reasons. This is allowable for up to 6 months from date of the transaction.
a) The Sub Merchant has not shipped the goods or delivered the promised service.
b) The Sub Merchant has taken back the goods /cancelled the services but not yet issued a refund on the credit card.
c) The cardholder's credit card has been fraudulently used by someone else to procure goods and services - without knowledge or prior agreement of the cardholder.
What can the Sub Merchant do in these cases?
a) Sub Merchant should keep complete proof of goods being shipped. This could be in the form of a Courier consignment note or Receipt from the final consignee.
b) If the Sub Merchant can show that the goods were actually shipped then no chargeback costs are to be paid by him.
c) If the Sub Merchant can prove that the customer was informed in advance about refunds / return of goods for replacement faulty goods, then in such cases the Sub Merchant will not be held liable for the chargeback.
d) Fraudulent use of credit cards is always at the risk of the Sub Merchant. In such cases, each Sub Merchant should keep an internal benchmark for the level of transaction for which he will take a risk, without asking for additional documentation from a customer.
Example:
ABC Shops has internally set a per transaction limit of Rs 30,500/-. Which means that up to Rs 30,500/-, ABC Shops will process an order without asking the customer to provide additional proof.
If the transaction amount is more than the internal benchmark of Rs. 30,500/- then poof is required for:
a) That this customer owns the credit card he is using.
b) He is who he says he is. (ID)
So ABC Shops asks any customer who does a transaction over Rs 30,500 to send by fax the following:-
a) The last statement he received from the credit card company which clearly shows his credit card billing address as well as the credit card number.
b) A copy of his driving license / national identity card / PAN No. / Passport which proves he is the person who has placed the order.
When ABC Shops has these documents, then they can go ahead with the customer without any doubts knowing full well that no fraudulent usage is taking place of the credit card being used for the purchase of their goods or services.
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