Delivery ConfirmationHow Delivery Notifications Can Help You Keep Better Records & Prevent Disputes

Can Delivery Confirmation Help Prevent Disputes & Chargebacks?

Requesting delivery confirmation for purchases offers a lot of benefits to you as a merchant. It’s proof that an order was sent, as well as evidence of the time and place at which the order arrived. However, many merchants remain hesitant about whether it’s really necessary.

With the boom in eCommerce, a growing number of customers already insist on discounted or free shipping. You could be (understandably) hesitant to add any extra perks that may increase costs. On the other hand, research shows that delivery confirmation can be an effective component of a chargeback prevention strategy.

Before we get too far into the weeds, though, let’s start with the most basic question: what is delivery confirmation, and how does it work?

What is Delivery Confirmation?

Chargebacks

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Delivery confirmation is an electronic notification received from a shipping provider. This notification informs the sender that a shipment has reached its final destination.

In simple terms, delivery confirmation is a note from your shipping carrier telling you that a package was delivered. That’s a good thing, but it’s important to note that delivery is not the same as receiving the packing. 

As a merchant, you want to ensure that each order gets all the way to the intended recipient. This is important for customer satisfaction, as well as for your own liability protection.

What Information Does Delivery Confirmation Provide?

Different delivery services each offer their own branded form of delivery confirmation. We’ll delve into the specifics of each later, but all perform the same basic function of letting you know that an order was delivered. This is called confirmation of receipt.

Confirmation of receipt is a basic acknowledgment that the intended recipient has received the information. In the context of emails or messaging, this might be an automatic notification sent to the sender when the recipient opens the message.

Of course, you may also get additional information, including:

The specifics of what is included in an information delivery confirmation can vary significantly based on the method of communication, the nature of the information, and the needs of the parties involved.

Why Is Delivery Confirmation Important?

Delivery confirmation is a logistical step in the process. It’s a key element in customer satisfaction and operational efficiency. It can offer:

In short, delivery confirmation isn't just about ticking a box. It’s a crucial function that enhances the customer experience, strengthens business operations, and provides vital protection in financial transactions.

Different Brands of Delivery Confirmation

The delivery confirmation services offered by major carriers like USPS, UPS, and FedEx are essential tools for both senders and recipients. Each service has its unique features:

How Delivery Confirmation Can Influence Chargeback Settlement

We should talk a little about how delivery confirmation fits into a merchant’s chargeback management strategy.

Merchants may use delivery confirmation when fighting an invalid chargeback filed with a Merchandise Not Received reason code. Numerous situations could lead to a Merchandise Not Received chargeback. The most common claims include:

• Failing to ship the order by the agreed-upon date.
• Failing to ship the order at all.
• Billing the cardholder before shipping the order.
• Failing to make products available for pickup.

Any of these (or other) circumstances could be cause for a legitimate chargeback. But what if a merchant ships an order as promised, but the cardholder falsely claims the order was never delivered?

Under existing chargeback rules, it’s the merchant’s responsibility to disprove the cardholder’s claim. That can be difficult, which is why it’s important to use any evidence that might invalidate a claim before it’s filed.

What About Signature Confirmation for Delivery?

In most cases, delivery confirmation on its own will not be enough evidence to force a chargeback reversal. Like we mentioned before, there are still ways for cardholders to get around it.

Signature confirmation, however, may help merchants challenge disputes and prevent them in the future:

In terms of chargeback management, delivery confirmation with a signature can be a great asset. So, why not use it for every order?

Not only is signature confirmation pricey, it can also lead to orders being sent back to the merchant if no one is available to sign for them. If this happens, the buyer may file a dispute; in that way, signature confirmation may actually cause more chargebacks.

For high-ticket items, especially those that can be easily resold, like jewelry or electronics, requiring a signature with delivery confirmation is a good idea. It’s not really recommended for average purchases, though. You have to consider the dynamics of the situation and determine if the added cost is justified.

Delivery Confirmation for Non-Physical Goods

With digital goods, there is no carrier service involved. Thus, proof of delivery is quite different… and often open to interpretation.

“Merchandise not received” claims for digital goods also fall under Visa reason code 13.1. According to Visa, the evidence required for representment includes “any documentation to prove that the cardholder or an authorized person received the merchandise or services at the agreed location or by the agreed date.”

This vague description is both helpful and harmful. On the one hand, since nothing is spelled out, merchants have options when accumulating delivery confirmation proof. Merchants can deploy:

• Cloud-Based Activation: This confirms delivery as soon as the consumer accesses the product key.
• Built-In Kill Switch: If the user files a chargeback, the merchant can terminate access to the service or product.
• Electronic signature page: Before use, the customers must indicate they have read and agree to the policies.
• Two-Step Authentication: This texts a code to customers, asking them to verify account information.
• Accurate Recordkeeping: Uses up-to-date data on IP addresses and other personal information for validation.

But, while any of these could be evidence of acceptance of delivery, Visa’s description is so broad that providing definitive, compelling evidence can be challenging. Using multiple methods seems redundant. However, it offers greater protection in the end.

Thinking About the Big Picture

Delivery confirmation with a signature can be a helpful tool in recovering lost revenue and lowering chargeback risk. It can be especially helpful for big-ticket purchases and/or items delivered digitally.

That said, no single technique is 100% successful at preventing or disputing chargebacks. There are many points where the protection mechanism can break down:

• Carrier personnel can make mistakes.
• Criminals can forge cardholders’ signatures or steal unattended packages.
• Friendly fraudsters can make claims that are hard to disprove.

Again, the chargeback representment process is subjective. Evidence that’s considered sufficient at one bank may not be enough at another. In fact, opinions can vary even within a single issuer’s chargeback department. Plus, even if merchants could prevent all “merchandise not received” claims with delivery confirmation, there are many other reason codes that merchants need to worry about.

We can’t expect piecemeal chargeback management implementation to be effective. Merchants have to analyze their overall goals and objectives and create a long-term strategy for reducing chargebacks and recovering lost funds.

Are you looking for a way to prevent disputes? The experts at Chargebacks911® can create a custom comprehensive chargeback management solution suited to the unique needs of your business. Contact us today for a free chargeback analysis and see how much you could save.