Types of Chargebacks

The three most common causes for chargebacks are as follows.

  1. Merchant Error: The seller bills for the wrong product or fails to issue an agreed upon refund.
  2. Criminal Fraud: A criminal uses a stolen credit card to make a card-present transaction or uses hacked information to make a card-not-present transaction.
  3. Friendly Fraud: The most common type, a customer decides it’s easier to contact the bank for a chargeback than call the merchant for a refund. Other times the customer may not recognize the charge on their statement.

Read more on chargebacks911.com (not affiliated with Xola).


Types of Chargebacks

When the chargeback is filed with the bank, Stripe sends through the specific chargeback type to Xola. Below are the three most common types of chargebacks we see among Xola sellers and what we can do together to fight each kind.

  1. Fraudulent

What it means: The owner of the card says that they didn’t authorize the charge. This can mean anything from the customer not recognizing the charge as it appears on the billing statement or that a person’s card was stolen and someone made an unauthorized purchase.

What Xola will do: In addition to submitting standard evidence, Xola will attempt to contact the cardholder to help them recognize the charge. However, Fraudulent charges are often actual fraud (i.e. someone purchased a service from you with a stolen card) and not possible to win.

Additional ways to fight this chargeback: If this is a case of the customer not recognizing the charge, contact the cardholder and help them identify it. They can then call their bank and drop the chargeback.

  1. Unrecognized

What it means: The customer doesn’t recognize the charge appearing on their card statement.

What Xola will do: In addition to submitting standard evidence, Xola will attempt to contact the cardholder to help them recognize the charge. These are the most desirable types of chargebacks to receive as it usually a case of the customer simply not recognizing the charge on their monthly statement. If the customer replies saying they do recognize the charge, Xola will ask them to contact their bank and drop the dispute.

It is crucial to winning this type of dispute that the customer actually contact their bank to drop the dispute. If they do not drop the dispute after telling us they will, we may ask you to contact them directly to request they contact their bank to cancel it. Xola is not able to drop a dispute on behalf of a customer.

Additional ways to fight this chargeback: As with Fraudulent disputes, contact the customer, help them identify the charge, and ask them to call their bank to drop the chargeback.

  1. Product not received

What it means: The customer says they did not receive the products or services purchased.

What Xola will do: In addition to submitting standard evidence, Xola will attempt to contact the cardholder to help them recognize the charge in the case this is actually Unrecognized.

Another common reason for this type of dispute is that the customer is upset that they were not issued a refund upon cancelling or no-showing. Regardless of your cancellation policy, this type of dispute is very difficult to win as a seller. The best thing you can do is to make your customers agree to your Terms & Conditions at checkout for each of your listings.

Additional ways to fight this chargeback: Signed waivers, security camera footage, customer reviews … Gather any additional proof that the customer was present on the tour they signed up for.



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