In the event of a client chargeback
or charge dispute, the best defense
is a good offense. The card issuing
bank is looking to see if you, the
merchant, had permission to charge
the credit card, and whether you
performed the work charged for.
The Most Common
While a cardholder may challenge
a charge at any time, the most
common reasons are: 1) The firm did
not have permission from the card
holder to charge the card; 2) The firm
did not provide the service or work
agreed to by the cardholder; or 3)
The dollar amount charged was different than what was agreed to.
How to Avoid Client
These steps on the front end will
help ensure your firm has the best
opportunity to win a chargeback
case, and avoid potential loss of
income. First, obtain authorization
directly from the cardholder for
the specific dollar amount being
charged. Next, confirm the name on
the card. If the name is different
from your actual client, obtain additional approval from the actual cardholder. This is common in certain
practice areas such as family law.
When accepting credit card information over the phone or through your
website, ensure you have a charge
authorization or a previous client
agreement on file allowing payments to be charged.
At the beginning of your relationship, have clients specifically initial
the firm’s payment and credit card
policies in their client agreements.
This specifically shows the client
was notified of the firm’s payment
policies and agreed to them.
For payments made by relatives
or other third parties, make sure to
include the specific client name,
invoice number and matter number
if possible. Obtain signature from
the third party to confirm they are
accepting responsibility for payment
of another party.
And finally, obtain client initials
next to any specific cancellation
policies included in your client
What Happens When You Receive
a Chargeback Notice:
It is important to be aware of the
steps that occur when a client chal-
lenges a charge:
• Your client has filed a formal dis-
pute on a specific charge amount.
• Notice is generally sent by the
mail from the Card-issuing Bank.
• If your credit card processor pro-
vides this service, as a courtesy
they will attempt to notify you
via email or phone to expedite
• Time is critical. Your firm will be
asked to respond within a 7-10 day
time period. (The exact date will
be set by the card-issuing bank). It
is important to respond promptly.
• Your firm will need to provide documentation to support the transaction in question. This should include
any payment authorization or
payment communication from the
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
What to Expect from your
Credit Card Processor
As part of their service, your credit
card processor should be available
to support your firm in your efforts
to win a chargeback dispute. Value-added service would also include a
review at no charge of your chargeback process, and recommendations
to avoid potential client dispute situations. These are best practices by
your credit card processor to help
ensure you and your clients have a
positive payment experience.
A chargeback occurs when your client or the cardholder
disputes a specific credit card transaction. The challenge
is initiated by the cardholder through their card-issuing
The challenge allows a cardholder to temporarily
not pay for a specific transaction while the charge is
AMY PORTER, CEO AFFINIPAY/LAWPAY
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How to Avoid Loss of Income
from Credit Card ‘Chargebacks’