Just like any other bill, it’s imperative to know what each fee on your merchant account statement means. This way, you’ll have a clear understanding of what products and/or services you are paying for and will have a much easier time reviewing it every month. Plus, if you’re not familiar with the types of costs associated with credit card processing, you may never realize that your provider is including unwarranted fees at a high rate, which often occurs. That means more money out of your pocket and less money to put back into your business.
One fee that may show up on your merchant statement is a chargeback fee.
Chargeback fees cover the cost of your merchant services provider looking into a chargeback claim by a customer. Your customer’s issuing bank requests assistance to thoroughly investigate such matters, which costs money. As a result, you, the merchant, are charged to offset these expenses.
Whatever the outcome of the investigation, a chargeback fee will be included on your merchant statement. This means that even if a chargeback is proven illegitimate, you are still going to be required to pay your provider for its part in resolving the situation. Typically, you are required to pay between $10 and $25 for this service.
If none of your customers make a chargeback claim in a given month, then you shouldn’t be charged for a chargeback in that month.
Because chargebacks can be costly, it’s important to work with a trusted merchant services provider and issuing bank to ensure that every case is carefully examined.
While you may not be necessarily thrilled about paying chargeback fees, it’s better than paying for a falsely made chargeback and risking your business’ reputation. Your provider’s job is not only to ensure you receive state-of-the-art credit card processing services and machinery, but to also look after your business with its best interests in mind. This means providing additional services, such as meticulously examining chargeback claims, to further protect your business and making your day-to-day operations run smoother.