Chargeback Reduction Plan For Your Business
Taking credit card payments at business while being an easy payment method could become a disaster sometimes when card users dispute payments and a chargeback or reimbursements occur. Reimbursements also called Chargebacks became a norm when card users demanded protection which is a costly affair for business outlets whilst also utilizing costly manpower to handle it. Here is more on the topic of preventing chargebacks and may help.. Such regular occurrences could dent a business outlets credibility to maintain a merchant account whilst Chargeback rates could become steep and accepting card or ACH payments with frequent disputes could bring high fines and Chargeback rates, which makes it necessary to reduce Chargebacks crucial.
Creating A Chargeback Reduction Plan
It is imperative that a business outlet finds out the cause of it where some disgruntled customers might want a Chargeback without conveying their problem to the business outlet. Other instances could be where the Chargeback is caused by a “friendly fraud”, where the customer whilst receiving the product still wants the money back. The other could be that the credit card was used fraudulently and the customer wants the money back hence finding out what the real issue is and being innovative could reduce Chargebacks but not eliminate it.
Key Elements Of A Chargeback Reduction Plan
A) Communication Is King
In any business open and good communication with customers is essential for the smooth flow of your business and this would ensure that the customer is aware the price he has to pay and what he would get in return for it. He should also know what your policies are whilst doing business with him and the rights that he has as the customer especially your return policy and warranties. He should not have any apprehension about any additional charges or costs that he is called to pay whilst transacting business with you and everything should be clear and precise. If you an online retailer it is that much more important to ensure that the customer has all the information he needs and they must know exactly what they are getting for the money they pay you. Clothing retailers should provide all details that they could about the product not limiting information only to size, they could add all measurements needed, type of material, country of manufacture and all other information available to make the customer fully aware of what they are paying for and this would lead to less Chargebacks. Answer all customer questions and keep the communication detailed and precise and provide all possible information, like your email address, telephone numbers, and most importantly your address, social media pages.
B) Handle All Customer Issues With A Smile
If a disgruntled customer has a problem sort it out immediately and find the best solution and if there is no way you could convince the customer offer a refund and solve and end the problem without it aggravating further. Handling the customer at your end would avoid a Chargeback which could bring additional problems to you and the business. Refunds may not be conducive for business but you may have to bear in mind that once a customer decides to obtain his money back he is going to ensure he gets it and would go to any length to get it. Even the customer is going to gain confidence knowing that doing business with you would be good for him and he will come back to you but if you get into a dispute he is going to talk about it for a long time.
C) Fast Response To Customer Issues
Once a customer has made the payment respond quickly by providing the service or product any delay on your part would irritate the customer and culminate in a Chargeback. If you need time to process the order for some reason or other keep then keep the customer informed through every step and ensure that he gets his money’s worth soon.
If you handle e-commerce transactions and shipping is involved in processing the order apprise the customer of the time likely to take to process the order and be specific about the time period. If you are offering services that would take time to complete it would be in your best interests to ensure that payments upfront could cause unnecessary conflicts hence being prudent in such type of businesses would be in your favor. The time period between collection of payment and completion of sale should be as short as possible.
Prevent Credit Card Fraud With Tools
Stolen credit card would place the business and the holder of the credit card in an awkward position and whilst the card holder would initiate a Chargeback the business outlet would have months of anxiety trying to sort out the matter. The most prudent thing would be to ensure such incidents do not occur though it could be said that it would be impossible to stop all credit card frauds being perpetrated by unscrupulous individuals. For instance a business could request for identification from the card presenter to check his credentials when the product or service is purchased at a point of sale. For e-commerce payments it may be difficult but there are some aspects that could be followed to prevent credit card fraud. Every business should be aware of the alarm bells when it rings especially when there are bulk orders from sources that you have not done business before. Any purchase that come with overnight delivery schedules and orders from different mailing addresses, or any other suspicious behavior on the part of the buyer. Large orders would also need scrutiny and any slight suspicion has to be checked out thoroughly before you ship the goods because you may lose your money in the excitement to procure the sale. It is advisable to have CVV or CVV2 codes for all online purchases which are three or four digit codes on the card to see that the card holder has the card with him whilst making the purchase. This is very important as most credit card fraud occurs with fraudsters using credit card information without having the card with them physically at the time. Avoiding transactions over the telephone or email would save you a lot of trouble and also anxieties which would hold you in good stead when you really would like to do your business in peace and not get involved in conflicts.
Chargebacks are costly and time consuming for any business hence prudently processing credit card payments would be in your best interests. It may not be possible to prevent all credit card Chargebacks but minimizing them is a possibility if not your business could be at wits end to ensure that all credit card payments are bone-fide and genuine. Putting in place certain prudent policies for credit card payments at your business and educating your employees how to collect payments and handle disgruntled customer would be one way of avoiding Chargebacks. Good customer service and being always alert to what is happening in your business when it comes to credit card payments would be in your best interests. Providing exemplary service coupled with a product of good quality could save you from much of the headaches that you may encounter in your business and also to prevent regular fraudulent payments that could dent your credibility in the credit card business. A little effort and you could prevent nuisance to you and your business from Chargeback problems which if given to escalate could bring your business down too.
Update For 2020
We have added a Chargeback Reduction Plan Template to assist you in completing your plan. Remember, a sincere analasys of your entire sales process is necesarry and honest changes must be made, for your plan to be taken seriously. With new chargeback thresholds presented in the Fall of 2019, now more than ever is the time to address these issues.
About The Author
Angela De Steffano
Staff writer at High Risk Merchant Account LLC
Angela is a merchant account specialist and heads the marketing team at HRMA-LLC.