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It should not come as a shock if a merchant receives a chargeback after the product is delivered. At the time of delivering the product to the customer, signature confirmation is necessary as it can save merchant from chargebacks (when the chargeback is based on the reason code: goods/services not received). It can be used as a part of chargeback prevention solution and representment strategy. But if it is so helpful then why are merchants completely ignoring it?

Delivery Confirmation
There are multiple methods to ensure that the product reached on the address provided by the customer. There are methods that provide the merchant with detailed information about the delivery (when, where and how). This type of information is quite relevant from the perspective of chargebacks but unfortunately is not used by all the merchants.
Let us discuss a few methods; how they vary from one another and which ones severely affect the chargeback management.

1. Confirmation of the Delivery: This is a most basic method used by merchants, which facilitates the merchant to know the status of delivery but does not assure that the package was handed over to the customer or was just dropped at the door. This method comes with certain disadvantages like:

Doesn’t guarantee that the product is delivered to the right person, who ordered the product and paid for it.
Does not prohibit re-routing of the package.
Does not verify delivery address.

2. Tracking of the Delivery: Some of the shipping companies use tracking techniques via which a package can be tracked by the customer as well as the merchant with the use of a tracking number provided by the shipment companies. Especially, if the package is scanned at the shipping locale or in the post office, the shipment number goes in the system and can be tracked. Pros and cons of this system are:

Assurance of successful delivery without guarantee of the package being handed over to correct person.
With the use of tracking number, the merchant can track the progress of delivery.
Tracking number can help the merchant in identifying the problem.
The Customer can track the location of the package.
Track of delivery date (when the package will arrive)
Helps in reducing chargebacks by providing more credible evidence.

3. Signature Confirmation: In this method, actual signature of the receiver is required at the time of delivery. This signature can be physical (on paper) or electronic. This method helps the merchant to fight against friendly frauds. If due to any reason, delivery was not successful, the customer will be notified and asked to collect the package from the carrier location/office. Optional variation in this method are :

Direct Signature Required
Adult Signature Confirmation

4. Direct Delivery: In this method, the package cannot be delivered to any alternative address without merchant’s permission. There is no requirement of recipient signature. This method helps the merchant to avoid fraud and chargeback by not letting them re-directing the address.
Limitation of delivery confirmation