Maintain A Good Relationship - good communication with customers can also help avoid chargebacks. That little bit of effort by the merchant can pay off in spades by avoiding chargebacks. The customer could have then emailed or called the company to cancel the service. How could the company have prevented this dispute? By sending out an email a few days before the biannual billing. Two months later, after the customer has forgotten all about the service, he/she sees a debit from an unrecognized company and files a dispute. Four months in, the customer loses interest in the service and abandons it. A customer decides to pay for the biannual service and receives a discount. Here’s an example: A company has two services for which customers can pay monthly or biannually. Recurring Billing - Another dispute scenario that can be prevented happens with recurring billing. If you aren’t able to come up with anything close to the spelling of your business name, communicate to the customer under what name the charge will come. If the merchant would have instead chosen something closer to its actual name, like “ABC CC,” that probably would have decreased the chance of getting a chargeback. The merchant chose one that is a little cryptic. On Monday, the customer sees a transaction for $15 from “A* CC.” The customer has no idea who this is and files a dispute.īank statements, like credit card statements, only allow for shortened names. The customer has a busy weekend and forgets all about the purchase. It’s a Saturday morning, so the transaction may not show up in the account until Monday or Tuesday. Maybe it isn’t, but if the business can do something to avoid this scenario in the first place, shouldn’t it? Let’s look at an example.Ī customer buys a small-ticket item from ABC Car Components.

You might say that isn’t the business’ fault. Unrecognized Business Name - If a customer doesn’t recognize a transaction, he/she can dispute it. With a little planning, you can decrease your chances of getting involved in a dispute. The best defense in avoiding ACH disputes is to prevent them. The customer agreed to an authorized date but the account was debited before that date.The amount debited from the account was not the authorized amount.The customer never authorized the transaction or the authorization was revoked.There are three main reasons that someone may dispute an ACH transaction: For businesses, it’s important to understand what leads up to such a dispute. The merchant will incur a fee, called a chargeback. The protection of consumers against unauthorized bank account debits is federally regulated under the Electronic Fund Transfer Act, which banks must follow.įor businesses involved in an ACH dispute, some merchants and banks will immediately credit the customer’s account. The ACH network allows up to 60 days for a consumer to file a dispute and two days for a business to file. Failure to do so can result in an ACH dispute and ultimately a chargeback. It’s a payment method that allows merchants to debit a customer’s bank account.īefore a merchant can debit someone’s bank account, it must have approval from the account owner and be in compliance with the ACH network. The basics of an ACH disputeĪCH stands for Automated Clearing House and is an electronic banking network used for direct deposit and electronic bill payment. In this article, we’re going to talk about handling their close cousin, ACH disputes, which are different from credit card disputes. The above scenario plays out every day in the form of a credit card dispute. Now you’re out the product, payment, and you’re in the hole by around 30 bucks more.

Even worse is when there’s an additional charge on top of it. Providing a product or service to a customer and then not receiving payment for what you supplied isn’t a pleasant experience for any business owner.

Ach transaction