how to avoid chargebacks in business?
- A chargeback occurs when a cardholder requests their bank to reverse a credit card charge that has been posted to their account. This is similar to a credit card fraud incident, where someone (unaffiliated with the retailer) makes false claims in order to obtain a refund.
- If you see a chargeback claim and don’t have reasonable cause for the chargeback, you must correct any errors or mistakes within seven business days. If you do not respond within that time, the bank will hold your account funds and also deduct an administrative fee (between $20 and $100 per chargeback) from your account.
- Chargebacks are one of the most common reasons for small businesses to lose money. If you want to stop them, start by having clear product and service descriptions, comprehensive refund policies, well-defined shipping expectations, and great customer service.
Learning how to avoid chargebacks and being able to prevent chargebacks is more important than ever before. Brands that don’t have the best consumer experience and take time for every step of their e-commerce journey can face losing profits due to chargebacks.
One of the easiest ways to become aware of potential chargebacks is through early shop abandonment, which happens when someone leaves before receiving a purchase or cancels a transaction. If you’re falling short of your customers’ expectations, one or more may initiate a chargeback, which can hurt your business and result in higher rates or worse, the account being dropped by your processor. You should consider learning how to avoid chargebacks in business.
Is a chargeback reversible?
Although reversing a chargeback is technically possible, it is difficult to do, and the odds aren’t in your favor. Card issuers technically have the power to reverse a chargeback, they tend to side with the cardholder over merchants and will not overturn a chargeback after it occurs.
Reduce and avoid chargebacks
How to avoid chargebacks and reduce them? The most important thing for a merchant to remember is the customer is the most important part of any transaction. You don’t have to have everything perfect—just all the things you can. If you fix one problem, it will quickly reveal even more. A lack of trust in a merchant can ultimately lead to lost business and chargebacks.
You can’t force your team to follow best practices, but it is possible to create standard procedures for accepting credit cards, and train employees on those procedures, to ensure that everyone is following best practices. Evaluate your team periodically and update your protocols as needed. Eaton-Cardone suggests using the address verification system, and consistently collecting CVC2/CVV2 verification codes should be standard procedure on every order taken – and that’s just the start of it.
When creating an online shopping experience that makes customers feel comfortable, you must create clear, detailed product or service descriptions. Always be as transparent as possible with your customers. Let them know exactly what they’re purchasing so they can make decisions about whether or not to purchase your item knowing everything about it. This also helps improve brand reputation and build trust with clients and their peers.
When it comes to chargebacks, businesses are in danger of losing money and customers. Having a clear, easy-to-understand refund policy can help avoid chargebacks. Display it at registers, post the information on your website, and print the details on each receipt. Be as specific as possible, including stating the window of time for returns, any restocking fees and any exclusions.
There are several things you can do to avoid chargebacks. The first thing is to not mislead your client by providing them with inaccurate or confusing information. Make certain that all product descriptions reference the product or service by name and are clear and understandable on receipts. Secondly, always make it a point to keep your own records so that you have proof of what happened.
If your business provides a high level of customer service and responsiveness, you can greatly reduce chargebacks by learning how to avoid chargebacks in business and providing features such as automated phone and email lines, emails with specific dates/deadlines for response and follow-up information, and even live chat functions which encourage customers to quickly resolve issues rather than waiting on hold.
If you want to how to deal with a customers who don’t pay? Click here to read
