Chargebacks can be a very damaging fact of life for most businesses that accept credit cards. There are many ways that businesses can help mitigate risk and avoid credit card chargebacks.
What is a chargeback? A credit card chargeback is what occurs when a customer refutes charges to their credit card issuer. If the issuer deems the customer dispute as valid, which typically happens, then your business merchant account is debited for a credit card charge that was previously cleared. In addition to this, typical chargeback fees can range from $15-$100. Check below for ways to reduce the risk of chargebacks for your business.
Use Clear Payment Descriptors
A majority of credit card disputes come from unclear payment descriptors. Payment descriptors are the name of the merchant that appears on customer’s credit card statements. If they see a charge from a place they don’t recognize making a purchase from, they will likely think it’s a fraudulent charge. Having a name that your customer will recognize is one of the most important ways to help reduce credit card chargebacks.
Take Care of Customer Service Issues
Credit card processors are the first to notify you if there is a customer that is disputing a payment charge. It’s always a good idea to get ahead when these notifications come your way, so you can address the issues head on. At the end of the day good customer service will always be the best way to avoid any kind of dissatisfaction. If the customer voices any issues, always do your best to resolve any issues.
Learn to Spot Signs of Fraud
Your business needs to have a chargeback protocol in place, because you never know when a credit card chargeback will arise. With a chargeback protocol in place, your business will have a system in place for fraud prevention and chargebacks. Some of the important things to look out for are suspicious details such as security codes not matching, billing and shipping codes not matching, etc. It’s often easy to confirm customer information through a thorough online search.