How to Protect Your Business From Chargebacks

When you open your business, all you want is to provide a product or service, sell and make money. However, it is not always that easy, especially if you are constantly facing chargebacks.

Chargebacks can harm your business, make you lose money and even leave your business with a bad reputation; even financial institutions will assume it’s a risk doing business with you. Another disadvantage is that chargebacks may make your business be listed as a high-risk business.

Chargebacks are supposed to help a customer or cardholder recover money from fraudulent transactions or protect people from dishonest merchants, but sometimes that’s not always the case. Here are a few ways you can protect your business from chargebacks.

Have good customer care service

One way to prevent a customer complaint from being a chargeback is to provide good customer care service. Encourage your customers to resolve any payment issues with you instead of going to their bank to dispute the transaction.

Ensure that you make it easy for customers to communicate with you. When a customer raises any complaints listen, and make every effort to provide a satisfactory solution, you may find there is no need for them to issue a chargeback. If it’s damaged goods, you can offer to replace the product. Such acts will make customers loyal to your business, and whenever they have issues, they would just contact customer care.

Ensure you follow payment processing protocols

Every payment processors have their own way of handling card transactions. Some payment processors may need you to capture card details, the customer’s IP address, use CVV and AVC verification, capture delivery details, and the like.

Ensuring you follow the protocols will help your business in cases of chargeback disputes. Plus, it will help weed out any fraudulent transactions before they are completed. Ignoring such steps will make the payment processor automatically rule against you in case of chargebacks.

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Use merchant descriptor the customer knows.

One common type of friendly fraud is when a customer receives their bank statement and a name they don’t recognize shows up, they immediately report it to their bank, then the bank issues a chargeback.

Ensure that your business name is what is on your online storefront. Also, ensure you put your contact on the description so that the customer will call you before complaining to the bank.

Manage customer expectations

Customers usually have high expectations about when they order products/services online. While it’s recommended to provide excellent customer care, it’s also advisable to set clear expectations.

Every image and description you use should reflect the actual product or service. If you don’t have a clear description of the product or service you offer, it will increase the risk of getting chargebacks for products not as described. In addition, ensure you list your policies in different places on your website. Lastly, remember to communicate to your customers about any changes or delays to shipping and deliveries.