Avoiding Chargebacks

Amy Mann
Amy Mann
December 14, 2015

In the event of a client chargeback or “reversal”, the best defense is documentation. The card-issuing bank is looking to see if your firm had permission to charge the credit card, and if you provided service. A few simple steps on the front end can help ensure your firm has the best opportunity to win a chargeback case and avoid loss of income. In most cases, chargebacks happen because the firm does not have permission from the cardholder to charge the card, the firm did not provide the service or work agreed to by the cardholder, or the dollar amount charged was different than what was agreed to.

Remember that it is critical to hold on to proof of work or services performed for tax purposes and cases of dispute. This should include any payment authorization or payment communication from the client. In the case of a chargeback, you may also be asked to show proof of work or services performed by your firm. Please note, you will not be asked to disclose sensitive client information or details on a particular matter. Keep in mind your client is declining payment to your firm, so the bank is already aware you are working with that particular cardholder.

What happens when you receive a chargeback notice?

A chargeback occurs when your client or the cardholder disputes a specific credit card transaction. This action allows the card brand or “issuing bank” to investigate the charge. If the transaction proves to be fraudulent, the issuing bank will refund the original value to the cardholder and begin the standard chargeback process. Your firm should expect the transaction amount to be taken from your account with an additional chargeback fee. The fee can be as much as $100. Your sponsoring bank will follow suit and check to see if the chargeback is valid, looking deeper into the supposed erroneous transaction. If they find any errors with the dispute the issuing bank will be notified and the chargeback will be denied.

LawPay will attempt to notify you via email or phone to expedite the process. Your firm will be asked to respond within a 7-10 day time period. However, the exact date will be set by the card-issuing bank.

Time is critical.

As part of our service, LawPay is available to support your firm in its efforts to win a chargeback dispute. We are also happy to review your chargeback process and make recommendations to avoid potential client dispute situations. Our goal is to help you and your clients have a positive payment experience. Helping attorneys get paid, it’s what we do!