Monday, June 25th, 2018
Any time a customer disputes a credit card transaction or reports a fraudulent purchase, a chargeback is initiated. Excessive chargebacks, which is when credit card companies force a retailer to refund the loss of a disputed or fraudulent purchase, can you’re your business its merchant account.
To limit them, you need to get chargeback protection. When it’s time to select chargeback protection, consider your transaction volumes and the type and size of your business.
Chargeback Protection for Small Online Businesses
If you are a small ecommerce business, consider Signifyd. It offers a 100% guarantee on orders of all sizes in the U.S. and abroad that are approved with Signifyd’s fraud scores. Signifyd gives a score to each transaction your business process.
Its low-cost, on-demand pricing plans fit into the budgets of new and smaller businesses. It gives you the option of choosing on-demand or complete services. Signifyd charges 4% for on-demand and 1% per transaction for complete services.
The downside to this protection is that coverage is only available for online businesses.
These causes are not eligible for chargeback protection:
- Customer service issues
- Disputes over delivery delays
- Product defects
Chargeback Protection for High-Risk Merchants
Chargeback Gurus takes a holistic approach to chargeback protection by trying to recover funds for businesses and to make them less susceptible to chargebacks.
It fights chargebacks that stem from non-fraud causes, in which customers have:
- Forgotten purchases
- Can’t locate items
- Decided they no longer want what they bought
Also, since it is a full-service solution, it doesn’t require you to set it up. Since high-risk merchant are prone to excessive chargebacks and refunds, this approach to prevent them, fight them, and recover loss funds is ideal.
One of the major cons of this service is that you must contact Chargeback Gurus directly for pricing information.
Chargeback Protection for Small In-Store, Online, and Mobile Businesses
Businesses that make sales using any of Square’s payment options get free chargeback protection. However, the protection has a $250 limit on order value and total coverage for a month. This amount is likely enough for smaller businesses that don’t generate a high volume of transactions each month.
Square also is convenient because it notifies of customer disputes via its dashboard. You can easily respond to disputes and submit documentation using its online system.
The coverage is offered for in-store, online, and mobile transactions, as well as service and recurring payments.
When It’s Time to Choose Chargeback Protection
Excessive chargebacks can cost you your merchant account, which impacts your ability to accept and process credit card payments. Once a merchant account provider terminates an account, it is very difficult to get a new one. If you manage to get a new one, expect to face stricter terms and higher rates and fees. To keep your chargeback threshold, you need to protect your business and its ability to operate in the future. Chargeback protection is critical to limit disputes. When you are looking for chargeback protection, remember to choose one that fits your transaction volumes, your risk level, and the size and status of your business.
Topics discussed in this article:
- chargeback protection