Fight back against chargebacks

Merchant account chargebacks are a dreaded event for any business that accepts credit or debit cards. Chargebacks are basically transactions that are disputed by cardholders, resulting in a reversal of original amount that was credited to your business. They are expensive, time consuming, subject to fraud and just downright annoying.
Chargebacks are not the same as refunds that are initiated on your end when, for example, a customer returns a product. Rather, chargebacks are initiated through the credit card issuer because the customer has challenged the charge or filed some kind of complaint.
The burden of proof usually falls to the merchant – to you. Credit card companies want to keep their customers happy, so they generally give them the benefit of any doubt on chargebacks. But not only do you lose the sale, you might lose the merchandise as well (or the time and expense providing a service) – plus pay a penalty (chargeback fee).
Many chargebacks can be prevented if you follow the right approach. Here are steps you can take:
• Seek feedback. Encourage customers to contact you first with any question or dispute. That means making it easy for them to find your phone number, email address, website or other contact information. The idea is to prevent calls going to the credit card issuer.
• Verify by email. For online or phone orders, always send a confirming email to the customer to verify. If the email bounces, or the customer won’t provide an email address, that’s a red flag. Confirming emails further reinforce your business name in the customer’s mind.
• Be nimble, be quick. Whatever you do, do it fast. Send notices immediately, ship goods on time, perform authorizations and process credit cards on the spot and respond to any and all disputes quickly. • Safeguard against duplicates. Be sure transactions are entered only once – a duplicate could trigger a chargeback. Ask your merchant account provider to enable duplicate-checking safeguards on your account.
• Display your return policies. Make sure your return, exchange and cancellation policies are made clear on your website, in your store, on receipts, in confirmation emails – and anywhere else you can think of. This discourages chargebacks and can also help you win disputes.
• Request delivery signatures. One crooked customer tactic is to claim goods were never received. To discourage this, consider using signature-required delivery services. •


Daniel Kehrer can be reached at editor@bizbest.com.

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