5 Ways to Avoid Chargebacks and Protect Your Business

protect your business

A chargeback is a consumer protection tool that allows users to get their money back after defective merchandise, unauthorized purchase, and other fraudulent activities involving their credit cards. They can be powerful in helping consumers recover their lost money, but what happens to your business when a client files a chargeback dispute? With each completed chargeback, you lose revenue from the service or merchandise your provided transaction, and you are likely to owe a chargeback fee to the acquirer. In extreme cases, you could lose your merchant account completely. In this article, we will teach you how to reduce credit card chargebacks and protect your business.

Provide Clear Details

Whether you sell products or services, it’s essential that you give clear information to avoid misleading your clients. Ideally, you want to demonstrate the service and present the product as accurately as possible to shoppers to avoid disappointments when the item arrives. You also want to have your shipping policies clearly outlined on your site, so shoppers know what to expect before making an order.

Have a Clear Return Policy

Your return policy should include your return guidelines in your store or online to provide customers with options before they reverse a transaction or file a chargeback dispute. Return policies allow customers to read to know how and when they can return items. They also help you pinpoint and take action when a customer attempts to return an item outside your terms. This can help you prevent return-based chargebacks that can happen months after the customer makes the initial purchase.

Track All Your Shipments

Don’t just be focused on making sales. It’s your responsibility to follow up with your customer to know if they received their item or not. Provide steps involved in the shipping and let your customers know when to expect the item and how they can track the progress. This provides peace of mind for customers that their item is not lost when it takes longer than usual. You also get the proof you need if a fraudster claims the item never arrived.

Offer Great Customer Service

From communication to transparency and quality product and service, excellent customer service is key in customer attraction and retention, and it helps reduce chargebacks. If you’re not friendly to your customers, they’re likely to give you a bad rating and seek help from their card issuer. Customers who file for credit card chargebacks often feel frustrated when the merchant fails to respond to their problems or takes too long to refund or replace an item. A customer-friendly attitude can be reassuring to your customers, especially when shipping takes too long.

Keep Detailed Transaction Records

Every detail in a transaction is vital for dispute preparation. Managing your transactions means noting down dates, amounts, cardholder names, and other essential information. You can go ahead and add signatures, customer service emails and proof of receipt of the product, customer phone numbers, and many more to help you collect compelling evidence. Remember each card issuer has its own policies and rules. Study each one of them and anticipate some of the details they’re likely to ask.

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