Tuesday, July 31st, 2018
Does your enterprise get a decent number of credit card orders in a day? Well, you probably have a few unpleasant chargeback stories you can tell. Although the chance to dispute sales has increased the confidence of e-commerce buyers, the ease of initiating chargebacks has cultivated a new class of malicious shoppers, who file chargebacks for no good reason. Even more striking are chargebacks that arise from identify theft, where a victim reports that their credit card was used without their knowledge or approval, and the card provider is left with no choice but to reimburse the funds.
Regardless of the cause, chargebacks can be a complicated and expensive problem for merchants. While it’s not possible to stop them altogether, you can reduce chargebacks by implementing the tips below.
1. Know All the Causes of Chargebacks
It may be easy for customers to file chargebacks, but there’s often a reason behind them. The three primary causes of chargebacks are:
- Clerical errors – Clerical mistakes like incorrect pricing, duplicate billing or the wrong shipping details.
- Quality issues – If that the purchased item arrived later than earlier promised or wasn’t in the expected condition.
- Fraud – If a cardholder suspects identity theft, unauthorized billing, and other malicious activities.
While it can be tricky to protect your online business from fraud, you can significantly reduce chargebacks by avoiding errors and giving your customers sufficient, accurate information before purchasing an item. You may also consider offering refunds to show shoppers that you’re confident in the quality of your products, and actively communicating with them to manage any expectations they may have.
2. Keep Records
The most effective way to deal with an incoming chargeback is to present concrete proof supporting your case. By not submitting a record of a customer accepting a charge, you’ll be giving them a clear path to getting their money back, even if a purchase wasn’t a result of fraudulent activity. To keep on top of chargeback disputes, always strive to maintain records of the credit card orders you receive.
3. Partner with Support Firms
There’s only so much you can do to prevent chargebacks while on your own. So, it’s best to have partners that want what’s best for your online business. Payment processors typically offer practical solutions to combat fraud and chargebacks, some of which include alert systems that warn merchants when chargebacks are initiated, giving them enough time to dispute them.
You can also reach out to chargeback insurance providers for a policy that will cushion your business in the event of an unexpected influx of chargebacks. An insurance cover may seem like an expensive outlay, but it can be a worthy investment, especially if you’re in a chargeback-prone industry, such as flight and hotel bookings.
Reducing chargebacks requires a comprehensive strategy that entails knowing and avoiding the causes of disputes, keeping records of all completed sales, and partnering with firms that can help you combat fraud and protect your business. At the same time, you must also ensure your customers are happy so that they never find reasons to file chargebacks.