Chargebacks are one of the most costly aspects that every business has to deal with at times. Unfortunately, there is no real way to stop all chargebacks from occurring. With that being said, there are ways to properly protect yourself from unfair chargebacks. In this article, we will be going over how finding a reputable merchant service company can help and how to avoid dealing with chargebacks on a continual basis.
What is a chargeback?
A chargeback is when a customer disputes a transaction with your business. They can either dispute the entire transaction or a partial transaction that you charged to their card. The biggest pitfall of a chargeback from a business standpoint is the fact that the funds are removed immediately until completion of the investigation. While you do get your own opportunity to defend the chargeback, it is a very time-consuming process that can require excellent documentation proving that you fulfilled your end of the bargain. Even if you do provide adequate documentation, you still have a chance of losing the money involved with the transaction. Thus, it can be a stressful and costly process for businesses to have to deal with frequently.
How a good merchant services company can help
If you are looking to avoid dealing with chargebacks and the drawbacks that stem from them, one of the best things that you can do is find a merchant service company that offers exceptional customer service and one that is known to fight for their clients. You want to identify a processor that has a highly rated customer service because they are going to be the most responsive and help you win more of your chargeback cases.
TIPS TO PREVENT CHARGEBACKS
1. Understand why chargebacks occur in the first place
This is perhaps the most important thing that you are going to want to do when it comes to preventing chargebacks from occurring. You will need to first identify and understand why chargebacks are occurring. Customers ultimately initiate chargebacks for various reasons. Sometimes it is because the transaction was fraudulent. However, more often than not, there are chargebacks for reasons other than fraud.
Sometimes it is because the customer doesn’t recognize the merchant account ID. If your transactions process in an unidentifiable way, the customer might assume that the purchase was fraudulent when in fact it was a legitimate transaction. Because of this, you want to be sure that you are using an accurate payment descriptor for your merchant account. You want your transaction to be easily identifiable. Otherwise, you might have to deal with unnecessary chargeback claims.
Another big issue is the belief that the transaction was billed incorrectly. These types of billing disputes happen all of the time and this is perhaps the easiest one to avoid. The best way to ensure that you are not experiencing chargebacks because of this is by properly displaying the entirety of the fees associated with your goods and/or services.
Another issue that might lead to chargebacks has to do with items not being received. This is why it is so important to sell items and deliver items high in value with signature confirmation so you have proof of delivery at the address that the customer ordered the item to.
2. Follow your processor’s protocol
Another big thing that you are going to want to do to limit the number of chargebacks that you have to deal with would be to follow your processor’s protocol. You want to be sure that you fully understand and follow the processor’s protocol when it comes to accepting credit cards in-person and online. This is going to allow you to properly identify and prevent fraud from occurring in the first place. Along with this, it is going to allow you to win more cases than not because you will have followed the processor’s protocol exactly.
3. Boost your customer service efforts
If you are looking to improve your chargeback numbers, you are going to want to ramp up your customer service efforts. It is very important to deal with any and all customer service issues as soon as possible. Otherwise, you are going to open yourself up to a lot of chargebacks that you have to deal with. Your credit card processor is likely going to alert you to any and all chargebacks that occur as soon as they occur. Because of this, you will want to try to deal with them and solve them as soon as possible. By providing excellent customer service, you will avoid a lot of chargeback scenarios because you will be able to satisfy the customer and/or solve the customer’s problems without them having to resort to a credit card chargeback in the first place.
4. Keep excellent records
If you are going to be dealing with chargebacks, one of the most important things that you are going to want to do is keep excellent transaction records. You want to be sure to have accurate records of customers transactions in order to be able to effectively prove that a transaction was legitimate. Without accurate records, you are bound to lose out on a lot of chargeback cases.
5. Fight fraud
You are going to want to try to implement fraud detection techniques in your business and you will want to train all of your employees on how to spot fraud. You want to let them know exactly how to handle all kinds of transactions appropriately which is going to allow you to effectively implement fraud prevention techniques including verifying signatures, checking identification, and more.