Chargebacks are not always caused by fraud or a processing error or another omission on the part of the merchant. In many instances customers are responsible for transactions that are charged back to your business. Whenever that is the case merchants should employ the following best practices to attempt to recover such losses:
Using e-mail collection messages and letters to collect low dollar amounts. If a customer claims that a transaction was fraudulent but you have determined that the customer has actually received the goods or services, you should contact the customer directly to recover the chargeback amount. For low dollar amount transactions, the most cost-effective tools at your disposal are the email and the letter. Send one to the customer requesting that the amount at issue is paid in full by a certain date. If you have received a letter from your customer as part of the transaction dispute, attempt to address his or her concerns and resolve the issue in a way that is mutually satisfactory.
Using phone calls in your collection efforts. Customers who do not respond to emails and letters should be contacted by phone. Once again you should firmly request that the outstanding balance is paid in full by a certain deadline.
Using external collection agencies. Some customers will not respond to your internal collection efforts and should be outsourced to external collection agencies. Collection agencies are typically paid on a contingent basis. Their rates vary depending on a multitude of factors, including total amount of the unpaid accounts, average account balance, age of the accounts (since the balance first became due), etc. Before selecting a collection agency, you should thoroughly evaluate the candidates and check their references. Make sure that they have experience working with other businesses in your industry and that their recovery rates are adequate.