Chargebacks & Company Insolvency

Jennifer Blake Posted on December 24, 2020

When an e-commerce company goes into administration, there are likely to be unfulfilled orders, gift cards, etc. Here we look at insolvency, what happens when a merchant owes a customer, and whether a chargeback can help.

Whether a chargeback can help depends on the company's financial situation. They may be able to fulfil all orders or issue refunds, offer part refunds, or nothing at all.

Some customers may make a chargeback request rather than a refund believing that the bank will somehow repay this cost. However, this is not the case.

It's important to note that there is no legal requirement for banks to process chargebacks. This is a service they provide to establish trust and security.

As the bank charges the merchant for processing chargebacks, they must be requested within 120 days.


How chargeback management software helps companies in administration

If your company enters administration, our chargeback management software can help. You will want to ensure that customers who did not receive a product or gift card get the maximum amount they are entitled to.

This can only be achieved if you can prevent false payment disputes and friendly fraud. Friendly fraud can occur when a customer makes a chargeback request, stating they did not receive a product, when in fact, they did. Friendly fraud can also occur when a customer claims a chargeback and a refund simultaneously, which is known as double-dipping.

Friendly fraud is on the rise, and this trend is expected to continue as more people shop online due to social distancing and restrictions on shopping on the high street due to the coronavirus pandemic.

Payment Help's chargeback management software interrupts customer behaviours at the point when they are requesting a chargeback. This helps reduce repayment costs for merchants.

Our software does this by allowing consumers to identify and verify their purchases, which they may not recognise or remember. Our chargeback management software can be integrated into various business management systems, discover more about the benefits of becoming a partner.