Responding to Claims of “Service or Merchandise Not Received”

In this digital age, almost everything is available at our fingertips or just a few clicks away. And, there is no better example of this than the upward trend of ordering and paying for goods and services on the web. For online merchants, this ease of ordering comes with customer expectations to take delivery almost as quickly or at least in a few days.

Online Merchants and Customers 

Online merchants have their own delivery norms and policies. These are typically available on their website or during the ordering process. Unfortunately, there are times when a merchant is unable to meet a delivery deadline. All because of circumstances within or out of their control. When a delivery deadline crosses for any reason a customer’s patience works. Many times a delay leads to thoughts of being cheated by the merchant.

And, when a customer thinks they have been taken advantage of by an online merchant. Their usual response as a cardholder is to report this to their card brand or bank and file a chargeback.

Safety Measures 

Online merchants can take precautionary measures to safeguard themselves from customer chargebacks claiming services or merchandise was not received:

• Make sure shipping and delivery details are provided during the checkout process.
• Send order confirmation emails that include delivery details.
• Promptly notify customers by email or phone if any problems arise that will delay delivery, being sure to let them know the reason for the delay and give them a new delivery date.
• Offer customers the choice to continue waiting for their order to arrive or to cancel their order and receive an immediate refund.

Even with a chargeback prevention system in place, you can’t avoid all the chargebacks. While there will be legitimate customer claims for non-receipt of services or merchandise, there will also be customers who intend to defraud merchants by claiming not to have received what they paid for even though they have, in fact, received their order. So, it is important for a merchant to pay careful attention to pending chargeback notices and respond quickly.

All credit card networks have their own specific reason codes and descriptions for chargebacks. Although the codes and descriptions vary, nature and documentation requirements to dispute claims are the same. Reason codes and descriptions in use by the four major credit card networks in the United States for services and merchandise not available are:

Visa 

Reason Code 30 – Services Not Provided or Merchandise Not Received

MasterCard  

Message Reason Code 4855 – Goods or Services Not Provided

American Express  

Chargeback Code C08 – Goods/Services Not Received

Discover  

Reason Code 4755/RG – Non-Receipt of Goods or Services

When disputing a chargeback claiming merchandise or services were not available, merchants must be active to provide specific documentation to prove delivery:

• For services, a customer signs a copy of an invoice or such other documents verifying that the customer has the service.
• When carrier delivery, a copy of a delivery receipt that clearly shows the tracking number, delivery address, customer signature, and date of delivery.
• For download of products, electronically delivery documentation.