Chargebacks are the enemies of business/bank relationships. They are the main reason behind companies being hailed as high-risk merchants, and the reason banks charge excessive merchant fees. There are ways that businesses can mitigate chargebacks, however. Implementing some of these ideas will go a long way to alleviating the stress caused by unwanted chargebacks.
Customers often make purchase, receive goods, and promptly forget about them. When the end of the month comes and there is a name on the credit card statement that involves a list of weird numbers or a bizarre name, they may not immediately recognise it. This leads to the customer questioning the payment, and often requesting a refund from the bank. This is easily quashed by clearly stating what the transaction is for. Codes or numbers can confuse a customer. If the company is called Famous IT, that’s what should appear on the statement; not FG004Acv. Using codes, numbers, or unfamiliar names immediately causes concern.
Keep it simple, stick with your company name.
2. Timeous delivery of goods/services
Ensuring that your goods are delivered before the charge shows up on a customer’s credit card bill is of the utmost importance. Without having the goods in their possession, or without having a receipt for the goods, customers tend to become doubtful and/or annoyed. This often leads to a bank dispute. Bypassing your company completely, they will ask the bank for a refund, leaving you unable to manage the dispute correctly.
Ensure that goods or services are delivered on time so that the customers aren’t tempted to go behind your proverbial back to ask for a refund directly from the bank.
3. Customer service excellence
Not enough stress can ever be put on the importance of great customer service. After successful purchases, people often feel slight regret over their purchases, or suffer from ‘buyer’s remorse’. Even if the customer is satisfied with the product, there may be another reason they aren’t necessarily happy with the purchase. This includes things like not actually being able to afford it, there is a newer model coming out soon ot the colour is not what they were hoping for. These reasons all lead to buyers disputing credit card purchases. Their embarrassment or their irritation over their purchase will surpass their conscious, and they will contact their banks. This is known as friendly fraud.
There are ways around this type of chargeback, however. Your customer service needs to be brilliant. Your customers need to know that they have an out, should they wish to rethink their purchase. You also need a way that you can try to prevent the chargeback before it happens. Allowing an exchange for the wrong colour, a refund within a certain amount of time, or even being able to have a discussion about how the purchase wasn’t, in fact, wrong, are all ways that your top-notch customer service team can mitigate this behaviour.
4. Anti-fraud protection
Online transactions are becoming more and more popular. In the world of eCommerce, card-not-present transactions are one of the only way companies are able to accept payment. In regular brick-and-mortar establishments, people are able to use chip technology with their cards, preventing fraud in a much easier way. Online companies don’t have that ease.
There have been ways that online companies have combatted this form of fraud, but it is an ever-changing environment and it’s important that the payment processor has the latest in secure online protection. Visa introduced the 3D protection system a while ago, with other big corporations following suit. This is a solid way of preventing chargebacks.
Overpromising, or being deceitful just to sell products will land any company in hot water. People these days are very quick to claim refunds for products that didn’t do what was promised. Consumer protection acts also ensure that this is a possibility. Advertising a miracle pill, or a printer that will go on printing forever is sooner or later going to be untruthful. This will lead to chargebacks in excess, and perhaps the total demise of your business.
Stating clearly what is to be expected of the products you sell is one way to ensure customer satisfaction. It’s not asking a lot to be truthful about your products. As they say: honestly really is the best policy.
Having looked over these five ways to reduce chargebacks, it should be easy to start putting plans into place. However, it is always a good idea, especially as a high-risk merchant, to ensure that your credit card processing company has all the bells and whistles as far as fraud protection is concerned. Octapay uses elite top-of-the-range security measures to help mitigate chargebacks. In the long run, this will ensure your company stays on the path to profitability and success.