What is Chargeback Reason Code 53?
The chargeback reason code 53 is a very common reason code. This simply means that the product or service is defective or not as per the commitment of the merchant. The cardholder can call the bank or the card issuer to raise a dispute. This is done in case if the product or service is not as per the commitment of the merchant. Most of the times the credit card issuer will intimate the cardholder to try to inform the merchant about the dispute or issue first. Once the customer has informed the merchant but has not received any satisfying response then the customer can contact the card issuer again. This time the card issuer will initiate a chargeback case request for the reason code 53. The Card Scheme or Card Brand designates the reason code after initial analysis.
Prerequisites for Chargeback Reason Code 53.
The customer must have concrete evidence that clearly shows the customer contacting the merchant to find a solution. This may be a written or electronic document that shows the customer requesting a product Return, Money Refund or Product Exchange.
Why the Chargeback Reason Code 53 appears? Reasons and Defence.
There can be many reasons behind this kind of chargeback we will try to discuss most of them here. You will also find the defense suggestions that may help you to avoid these chargebacks.
- Product not as per the specifications mentioned by the merchant at the time of the order placement. Merchants should try to put enough detailed information on the product info page. High-resolution pictures should be available on the product page.
Defense – If the merchant is sure about the product is exactly the same as represented on the website then merchant should send the proof of delivery and documentary evidence to prove the precise quality.
- Product Variation not the same. For example, a customer ordered Red Glasses but did receive Blue Glasses. Inventory management and proper Supply chain management can reduce these kinds of issues. Before shipping make sure you match the order with the item being shipped. also match variation in size, color etc.
Defense – Understand the issue. Initiate a refund if the customer is not ok with RMA. If the customer is ok with RMA then recall old shipment and immediately ship new shipment without any errors. Take customers confirmation on email.
- Product Size different. For Example. The Customer ordered a large shirt but did receive small. Double check what is being shipped.
Defense – Identify the issue and educate the customer about possible resolutions. refund or reshipment with the recall of the previous shipment.
- Product not genuine. Never ship products that are a replica or counterfeit.
Defense – If you are sure the product is genuine then share the information about the source of the product, Serial number info or any other information that may help the card issuer or card brand to trust you.
- Shipped to a wrong location. Sometimes because of human error, this can happen. It’s a good idea to confirm the shipping address by sending a confirmation email to the customer with the shipping address on it.
Apologize and collect the correct address of the email. Ask the customer to initiate an RMA case . Keep everything documented. Recall the merchandise and reship to the correct location. Issue refund if the customer insists.
- The product does not solve the purpose. This is rare but may happen. It will be easy to understand with an example. A merchant sells mobile phone chargers. The charger shipped claims to work properly with a specific model of mobile. When the customer got the product the charger is not compatible with the phone but is in a live state.
Defense – Issue Refund or reship and initiate RMA.
- Damaged Product. The product received is damaged. Make sure your shipping partner is reliable and offers safe delivery.
Defense – Initiate Refund or Reship as per customers wish. Do not push the buyer.
- Dead On Arrival. Manufacturing Defect. Customer claims that the product was faulty and never worked. This may happen with electronics, Electrical or Mechanical items.
Initiate Refund or reship after initiating RMA for the faulty product.
- Both the Product and Packaging have tampered. Customers do not like to use the products if they see the packaging has tampered.
Defense – Try to convince the customer is the product is not damaged. Sometimes people may understand. In case if the product is also damaged then offer refund or reshipment.
- The product of inferior quality than claimed on the website. Make sure you don’t compromise on the quality of the product and only ship what you claim to sell.
Defense – Never sell inferior products. Only show what you ship. If you are sure about the quality of the product then fight the case and share the POD with the documents of the source of the product. This may be the bulk invoice from the product manufacturer or stockist. You may also show electronic evidence that may show the serial number of the product is genuine. many computer manufacturers offer this feature.
- Service not prompt or not delivered as committed. In a scenario where the customer pays for service make sure you make the service available as per the SLA or Service level agreement.
Defense – Apologize and try to retain. If it doesn’t work then issue a refund.
Fight if you have documentary pieces of evidence to show that the customer is lying and has received the services with satisfaction. Use regular surveys and feedbacks to make your case strong.
- Fake or Replica Item shipped by the merchant. If you have done that then you may be in a serious trouble. Payment processors take these cases very seriously. Never ship or sell fake or Replica products. This may lead to the account being closed.
Defense – If you shipped Replica or a fake item. Issue Refund and ensure you never repeat that. This may attract serious actions from the Card Brand, Local Authorities, Govt agencies, Merchant Account Acquirers and PSP. Don’t play with fire. Remember Replica Merchant Accounts don’t Exist
How to fight or defend the Chargeback Reson code 53.
The best way to reduce returns and chargebacks is by delivering quality service and products. Merchants must offer prompt responses to the buyers whenever needed. Business owners and the entire team must closely work to ensure faster delivery of the merchandise. In the Reson Code 53 Scenario most of the issues can be easily resolved by maintaining a prompt communication with the buyer.
Let’s look at ways that can help you reduce chargebacks including the one with reason code 53.
- Document everything – Create Pieces of evidence. Yes, that’s true. Always document details of communication and send a copy to the customer. After every satisfactory call request a survey or satisfaction response from the customer.
- Keep Call Recordings. If your sales model includes sales via inbound call center then record the entire call. You may also send the copy of verification and authorization call to the customer.
- Show and Declare what you ship. Show detailed product information on the relevant product pages. Upload multiple high-resolution images. Mention details about color, Dimension, and Specifications. It will be a nice idea to send a copy of product info sheet in the order confirmation link. In case if the PDF copy is not possible then share the link to the product on the order confirmation email.
- Check before shipping. Make sure you only ship what the customer ordered for. Do take special care when the product has variations in color, size or Fragrance etc.
- Check the Shipping Address. Never ship to the wrong address. If you have any confusion then call the customer and confirm. Most of the times the customers will feel great about the call.
- Pack Properly Ensure Proper Shipping Method. Your logistics partner is not taking care of only your company. they work with many. Ensure you use high-quality packaging material. Provide tracking information to the customer as soon as you get one. Send the copy of Proof of Delivery to the customer and send an order fulfilled email. keep POD and all communications with you for at least 12 Months. In case of ACH payment processing, you may keep it up to 24 months.
Recovering money from a fraudster may be challanging in case of fraudulent transaction. You may try to take legal options but if you use chargeback alert services then it will certainly work as the first line of defence. Fraudsters do this because they think that they cant go to jail for fraudulent chargebacks.
Above information about the chargeback reason codes and Chargeback alert services may not be 100% Accurate. Merchants should verify the card brand website and service provider website for accurate information.