“Not as Described” Chargebacks: Legitimate or Fraud?
The Reasons Behind the Reason Code
Online retailers dealing with merchandise or services often hear the phrase, “But that’s not what I ordered!”
For a variety of reasons, the customer thought they were receiving one product, but ended up with something different. While frustrating, correcting this issue is often as simple as replacing the item with the correct one. Unfortunately, not all merchants are so lucky. The unlucky ones face the growing phenomenon known as chargebacks.
Chargebacks occur when a customer files a dispute over a transaction with their bank, resulting in a credit to their account, and a debit to the often unsuspecting merchant’s account. Despite the original intent of the chargeback process, chargebacks are most often used by unscrupulous individuals attempting to defraud a merchant or by cardholders engaging in friendly fraud.
Understanding “Not as Described” Chargebacks
When evaluating the reason for a chargeback, merchants are provided with a reason code to help identify the specific issue the cardholder had. One of the most common reason codes is the “Not as Described” chargeback.
A “Not as Described” chargeback can result from one of three potential causes:
- Intentional merchant fraud, carried out by an unscrupulous seller
- Merchant error
- Friendly fraud on the part of the cardholder
This chargeback occurs when a cardholder receives merchandise that differs from the description given, is damaged or defective, or was described as genuine but is counterfeit.
Merchants that receive a not as described chargeback can dispute the claim by providing the card network with specific, detailed information that demonstrates the legitimacy of the original charge. This documentation may include such items as:
- Proof of authenticity
- Delivery confirmation
- Receipt of services
- Evidence of the merchant’s attempt to correct any discrepancies
- Copies of the terms of the sale provided to the cardholder before purchase
Each network has specific requirements that must be followed to successfully dispute chargebacks and merchants must be sure to meet their demands.
It is important for merchants to dispute illegitimate “Not as Described” chargebacks to prevent future loss of profit and to protect the merchant’s reputation with banks.
Merchants cannot account for every possible situation to prevent chargebacks, but they can take steps to ensure that they eliminate the possibility of chargebacks resulting from merchant error.
Verifying product descriptions, providing sufficient staff training to prevent incorrect order fulfillment and prominently displaying the terms of sale and return policies are all part of the prevention strategies that merchants can take.
In any situation, the best solution for dealing with any issues pertaining to chargebacks is to seek outside help. Services dedicated to chargeback risk mitigation are experts in the subject, trained to competently handle chargebacks while preventing future disputes.
If you have additional questions, or are interested in conducting a free chargeback analysis for your business, contact us today.