Managing Merchandise Not Received Chargebacks
Chargebacks labelled ‘Merchandise or Services Not Received’ hit businesses hard–especially across retail, digital goods, and ticketing industries. These disputes happen when customers claim they did not receive purchased items or services.
This article outlines strategies to reduce risk, respond effectively, and protect your revenue.
Handling Chargebacks in Retail and Mail Order Goods
For physical goods shipped to customers, disputes often occur when deliveries are delayed, lost, or customers claim non-delivery. Protect your business by:
- Using shipping services with robust tracking and delivery confirmation.
- Clearly communicating shipping timelines and potential delays at checkout.
- Requiring signatures or photographic proof of delivery for high-value items.
- Providing proactive shipment updates through email or SMS notifications.
- Offering clear and accessible options for refunds or replacements to avoid disputes.
Managing Chargebacks for Digital Goods and Services
Digital goods such as software, subscriptions, digital media and online courses present unique challenges, as proving delivery can be complex. Reduce risks by:
- Keeping detailed digital records of account activation, user logins, download timestamps and usage data.
- Clearly explain refund policies and purchase terms during the checkout process.
- Sending immediate and clear digital receipts to confirm purchase details.
- Providing reliable customer support channels to promptly resolve issues.
Addressing Chargebacks in Event Ticketing
Event tickets, where non-attendance or cancellations occur, are often disputed. Best practices include:
- Offering customers clear refund options, either directly to the original payment method or via gift certificates.
- Documenting customers’ refund choices and communication thoroughly.
- Using attendance verification (ticket scans, seat checks) to refute unjustified claims.
- Clearly displaying refund policies at the point of sale and in event communications.
Reduce Chargebacks with Evidence
When disputing chargebacks, especially for “Merchandise or Services Not Received,” solid documentation is your best defence. No matter your industry, here’s what matters most:
- Proof of delivery for physical goods.
- Digital receipts, download logs, or usage data for digital products.
- Customer communication records showing interactions, support, and refund options.
- Screenshots of agreed terms and refund policies at checkout.
- Third-party refund protection documentation, if available.
Regularly Evaluate Chargeback Ratios
Continually monitor your chargeback-to-sales ratio and refund processes. Regular analysis helps determine whether your current rate is acceptable or if further policy adjustments and risk management strategies are needed.
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