Chargeback Prevention
A systematic approach to reducing payment disputes before they happen. Combine clear billing descriptors, proactive communication, and intelligent risk scoring to keep your chargeback ratio below 0.5%.
1. Billing Descriptor Hygiene
Your descriptor is the first thing a customer sees on their statement. Use a recognizable name that matches your product domain exactly. Append a support phone number so confused customers call you instead of their bank. Test descriptors across Visa, Mastercard, and Amex — each network truncates differently.
2. Pre-Dispute Communication
Send a transactional email 48 hours before a subscription renews. Include the amount, date, and a one-click cancellation link. When a refund is requested, process it within 4 hours and confirm via email. A customer who gets their money back fast rarely escalates to a chargeback.
3. Risk Scoring at Checkout
Flag transactions where the billing address is more than 500 miles from the IP geolocation. Require 3D Secure for first-time customers on high-ticket items. Maintain an internal blocklist of email domains and card BINs with elevated dispute history.
4. Compelling Evidence Repository
For every transaction, store: IP address with timestamp, user agent string, a screenshot of the checkout page showing the agreed-upon terms, and delivery confirmation if the product is digital. When a dispute lands, upload this packet within 72 hours. Merchants who submit compelling evidence win ~65% of chargebacks.
Pro tip: Keep your chargeback ratio below 0.65% to avoid Visa and Mastercard monitoring programs. If you cross 0.9%, implement a velocity check that blocks customers with more than 2 failed payments in 24 hours.