The general chargeback process exists since the 60s/70s. The chargeback process was created with the aim to protect the buyers’ rights against big companies. However, little by little consumers as well as fraudsters, found a way to utilize this process for their own gains.Today many merchants face a big challenge to manage and to understand this procedure. In this article I would like to introduce the topic, as well as showing some measures to prevent different kinds of chargebacks, without bigger efforts.

What is a chargeback?

Similar to a debit process, customers are able to process chargebacks onto credit card. The timeframe for a buyer to open a chargeback is in general is half a year, depending on card brand and region. Chargebacks may affect fees as well as other processing conditions, according to Acquiring Banks and Credit Card Schemes.

 3-D- Secure

This method is quite common among merchants. Most likely many online suppliers for goods and services already considered the possibility of implementing this feature into their payment methods. Requesting a specific and personal code as a measure should make sure the legitimacy of cardholders and transactions. In matters of chargebacks, this method might be useful to protect yourself from e.g. willful fraud cases or not-authorized credit card use by third parties (family members, partners, etc., so called “friendly fraud”), which might turn into chargeback quite fast. 3-D- Secure can also be rather attractive with regards to the possible liability shift in cases of chargebacks with fraudulent background. When the liability shift is triggered in most cases a third party is liable for the transaction of chargeback instead of the merchant. In case you are already a PAYMILL customer and interested in using 3-D- Secure, please contact our customer support [email protected]

Further information about chargebacks can be found here.

Optimized Customer Support

If customers are faced with problems related to their purchase, they want to have rapid solutions; also frequently cardholders prefer contacting their issuing bank than going back to the merchant with requests or concerns. Which makes it important for merchants to ensure the end customers have direct and absolute access to your customer support. Having non-transparent contact details, no options for direct support, or to provide delayed responses might be reasons for customers to contact their banks directly and request a chargebacks to solve the issue, e.g. in case of defective or belated goods or services. Your main page optimally should lead towards your contact details or support area. Furthermore, enlarging your support offering might be useful, for instance support on social media, online chat, 24/7 support or self-help. You could also focus on a specific product or customer instead, to guarantee their satisfaction by contacting them directly. The benefit lays in clarifying potential issues or specific ones to avoid the chargeback process.

Safety Standards / KYC

Shopping malls, grocery shops, jewelry stores, banks – all of them distribute goods and services to end customers and have security systems in place in order to protect their products, such as security cameras, security measures to display items, security personnel, etc.…

As well as physical stores, online merchants should protect their online shop.  Implementing the right safety standards can prevent many chargebacks. Protect e.g. high value goods by verifying the cardholders, requesting further documents of authentication (copy of ID /passport or credit card, signatures, etc.) or using verification via email / telephone. Consider implementing internal monitoring thresholds by determining maximum transaction amounts, origin of IP address and / or billing / delivery address. In cases of detecting suspicious transactions, please refer to the paragraph “refunds”.


Quick checkouts and catching slogans are popular and commonly used measures to attract customers to your shop and increase your sales numbers, but also with this there are downfalls. One of the general chargeback reasons is  “goods not as described”. Make sure goods and services within your shop are described as accurately as possible to avoid mistakes and dissatisfactions.

Delivery times

Even if there is a delay in delivery of one-day customers might request a chargeback to their issuing bank. Make sure that the days of delivery are fulfilled as mentioned in the product’s description. Eventually calculating some days of buffer helps you to be on the “safe side”. If you noticed difficulties in providing your customers with the ordered goods in time, reconsider your delivery times for the specific offers. Informing your end customers pro-actively about upcoming latencies may be useful to reassure your customers having a positive feeling with regards to your transparency.


Different companies might have different opinions about “customer always being right”, regardless: customers always believe that theirs is the only truth. To avoid time and cost-consuming discussions, have crystal clear conditions for the specific subscriptions. Display them during the checkout, link the T&Cs clearly, especially with regards to cancellation policies and / or additionally send these conditions after purchase to your customers. One current and more and more popular method is to remind cardholders about the upcoming credit card debits, matching to the interval of the subscription, which is sent some days / weeks in advance to the charge.  This helps to maximize the trust in your company and minimize the risk of chargebacks being processed by the customer.


In case you identify any suspicious transactions or customers, consider providing limited services and/or request further information/documentation. Respectively consider holding back your goods for the present until such verifications take place. This might help to avoid loosing also your goods, as well as the transaction amount would a chargeback come. Meanwhile, you should think about refunding the cardholder. Background: If a transaction is unauthorized, the real and punished cardholder might see the refund in their statement and reconsider not to process a chargeback with the issuing bank. In case of a false positive and the customer is genuine, you can calm an angry customer by showing them the advantages of this kind of security steps (“By doing this we make sure your card is always being used in a safe environment within our online shop”). Furthermore you can use the notifications provided by PAYMILL about potential fraudulent transactions and consider issuing refunds to the credit cards before chargebacks are processed.  This measure can help disputing the chargeback more easily if it comes.

Taking one or more of the paragraphs into consideration could help you to have the basic chargeback management measure in place. Concluding, it needs to be point out that none of the mentioned solutions is a 100% protection against fraud or chargebacks. Because of the fast growing ecommerce industry, the development of unscrupulousness is growing rapidly, too. However, being aware and interested helps you to keep your online business safe. Being your online payment provider, we would be glad to support you in case of any questions and concerns with regards to fraud or chargeback topics. Don’t hesitate to contact us!

Maximilian Kürschner

Maximilian Kürschner is an expert on chargeback and risk issues. After a appreticeship at the Hypovereinsbank, he specialized in Risk at PAYMILL. After several years as a Risk Operations Specialist, he has been a Senior Risk Analyst since 2017.