Services Not Provided Chargeback

Why Merchants Receive Services Not Provided Chargebacks

Technically, chargebacks are a consumer protection mechanism. They were designed to protect innocent cardholders from fraud. However, many consumers have learned to abuse the chargeback system. Services not provided chargebacks are a perfect example of how merchant rights can easily get violated.

What are Services Not Provided Chargebacks?

The card networks have lumped two different transaction disputes together into one reason code.


The card networks outline the various causes for each chargeback reason code. When reviewing the Services Not Provided or Merchandise Not Received chargeback reason code, the majority of causes are associated with physical goods.

  • The merchant failed to deliver the products.
  • The merchant billed the cardholder before sending the merchandise.
  • The merchant didn’t deliver the items by the agreed upon delivery date.
  • The merchant didn’t make products available for pickup.

It is challenging for merchants to manage the “services not provided” portion of this reason code because the focus is primarily on merchandise, not services.

The causes for services not provided chargebacks is fairly ambiguous: the merchant failed to provide the services.

Merchant Error vs. Friendly Fraud


On the surface, it would seem services not provided chargebacks are the result of merchant error. The merchant failed to do something as promised. Or, the merchant’s policies and procedures weren’t clear, and there was confusion regarding what the consumer would actually receive. It’s also common that marketing causes chargebacks; unrealistic promises might be made.

It is important for merchants to carefully review their policies, ensuring business best practices are always enforced. As many as 20-40% of all chargebacks are caused by merchant error. If services not provide chargebacks are resulting from merchant error, they are 100% avoidable.

However, it is often difficult for merchants to review their own business with an objective and unbiased mindset. If you’d like help isolating merchant errors that cause chargebacks, let us know. Chargebacks911® offers a 106-point inspection of a business’s policies and procedures. We can help merchants identify and prevent risks.

While some services not provided chargebacks might be caused by merchant error, they can just as easily result from friendly fraud (also known as chargeback fraud). Visa chargeback reason code 30 and MasterCard chargeback reason code 4855 are commonly used by friendly fraudsters.

Friendly fraud isn’t committed by bands of criminals; it is perpetrated by seemingly satisfied consumers. Therefore, it is extremely difficult to prevent this type of chargeback. Usually, if services not provided chargebacks are tied to friendly fraud, the only option merchants have is to try disputing it.

Services Not Provided: The Consumer’s Argument

Chargeback fraud is a dangerous eCommerce side effect that negatively impacts everyone involved in the chargeback process: consumers, banks and merchants.

Banks suffer from increased chargeback requests, overtaxing their resources. While some banks are hesitant to jeopardize their relationship with cardholders and operate under the assumption the customer is always right, other financial institutions simply don’t have time to manage friendly fraud.

Both of these situations result in the same thing: there isn’t enough due diligence and illegitimate chargebacks are easily processed without adequately investigating the cardholder’s claim.

This raises an important question.

Can a chargeback be filed with a "services not provided" reason code if the customer is the person who makes performance impossible?"

Unfortunately, this is a prime example of friendly fraud put into practice. Banks don’t properly validate the cardholder’s claim, and the burden of proof is left to the merchant. Merchants are assumed guilty before innocent.

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Prevention and Representment

There are a few prevention techniques merchants can implement to try avoiding services not provided chargebacks.

  • Check the service descriptions. Do they accurately portray the services that will be offered? Use concise, easy-to-understand wording, yet be detailed in your descriptions. Explain everything that is involved. Use videos and images to highlight potentially confusing aspects.
  • Have the customer sign off on the terms of service before completing the transaction. Ensure the customer knows what to expect.
  • Provide outstanding customer service. Address all questions and grievances promptly. Offer various ways for the customer to communicate: live chat, email, phone, etc. Check social media accounts regularly and reply to comments.
  • Issue credits and refunds promptly. If the merchant-customer relationship is strained and you sense a potential chargeback threat, cancel the services and issue a refund.

Merchants can do their best to prevent chargebacks, but they can’t account for unpredictable and unsavory consumer behaviors. When chargebacks do happen, merchants must engage in representment.

Representment (or the act of disputing a chargeback) serves two valuable purposes:

  1. Disputing illegitimate chargebacks allows the merchant to recoup revenue that never should have been lost in the first place.
  2. Disputing each case of friendly fraud helps effectuate industry-wide change. Banks take notice when merchants fight back and make more of an effort to validate the cardholder’s claim before proceeding with chargebacks.

To dispute services not provided chargebacks, the merchant will need valid forms of compelling evidence. It is important to gather all the necessary paperwork while processing the original transaction and performing the requested services. This helps ensure a strong defense if the need arises.

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Examples of compelling evidence that could dispute a services not provided chargeback include:

  • A signed copy of the terms and conditions, outlining exactly what services will be provided
  • Email communications that defend the merchant’s actions (if the customer is being obstinate in person or over the phone, follow up with an email that outlines the discussion to ensure written documentation is available if a chargeback is issued)
  • Evidence that services were provided successfully (examples could include a signed work order, emails, IP address information indicating the cardholder accessed digital services, activation key or license usage, etc.)

Representment is a challenging task. Merchants usually lack the necessary resources and knowledge to craft a successful dispute.

To make things even worse, chargeback disputes can actually increase risks and costs if not done properly. Merchants can alienate banks and damage their reputation. Incomplete representments could result in a second chargeback and more expenses.

If you’d like help disputing services not provided chargebacks or any other type of transaction dispute, let us know. Chargebacks911® offers both end-to-end accountability and on-demand services. No matter what your chargeback management needs, we can help.

Prevent Chargebacks.

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