Prevent Chargebacks

Happy woman receiving package from delivery man_CardinalCommerceAny transaction between a merchant and a consumer could result in a chargeback. Chargebacks are always initiated by the consumer. The process begins when the consumer notices fraudulent activity on his card (or activity he does not recognize), and chooses to dispute a charge with his issuing bank. The bank issues the consumer a refund, reversing the charge to the merchant’s bank. In chargeback cases, the loss of revenue for the merchant can be significant. Additionally, if merchants accumulate enough chargebacks, it can damage their reputation with financial institutions. Chargebacks are a serious issue, and every merchant should go to great lengths to try to prevent them.

Complete Transactions Carefully

As the business owner, pay attention to your online purchasing process. All steps in the process should be clear, not just for you, but for the consumer. Always consider the consumer’s experience. Is it clear when the sale has been completed, or is it easy to accidentally purchase something twice? The consumer will input their personal information, credit card number and shipping details in different fields; are these fields clear or will they confuse the consumer? Consumers who feel that they made a mistake in the payment process, or who feel that the process was confusing, may file a chargeback. Make sure that the company name that appears with the charge on a consumer’s statement is the company name the consumer will recognize. If that name is a holding company, your buyer might not make the connection and may dispute the charge. Hire an expert, if needed, to prevent errors in the purchasing process.

Offer Great Customer Service

The difference between a simple, quick refund with a consumer, and a long, difficult chargeback process with the consumer’s issuing bank is often customer service. If a merchant maintains a good reputation in terms of customer service, it means a lot to consumers. Consumers who have had good experiences with a given merchant will likely speak highly of that business to their peers, but unhappy consumers may be more likely to spread the word if a merchant is unreasonable or unresponsive when dealing with a disputed transaction. It’s important to create, and promote a positive, approachable atmosphere that lets consumers know you will gladly discuss any mistakes. A positive conversation with a consumer could help prevent chargebacks entirely. 

Establish Clear Refund Policies

If you express your refund policies clearly, it can help prevent chargebacks. Consumers often have a lot of questions regarding refunds. How long is the window to return or exchange merchandise? What form will the refund take—store credit, partial merchandise credit or full merchandise credit? What does the consumer have to return in order to receive the refund —the item, the receipt, the packaging, an accompanying invoice or all of these items? The merchant is responsible, not just for creating and enacting, these policies, but for communicating them clearly to the consumer.

Use Reputable Shipping Services

If you use a faulty shipping service, it can result in a chargeback. As a business owner, you can prevent chargebacks by hiring a capable and responsive shipping service. Not all shipping companies, however, operate on equal terms. A certain shipping organization might make more sense for your business, depending on the type of goods you typically ship. Examine the costs, timing, flexibility and overall service packages before committing to a particular option. Chargebacks can occur if a consumer doesn’t receive their package within the specified timeframe. Don’t let a shipping failure cost your business. Invest in a capable and reliable shipping service.

Back to Chargebacks

Are you experiencing chargebacks in your online store? Are your consumers abandoning their carts before buying? Learn how Cardinal Consumer Authentication can eliminate fraud and false positives, and provide the benefits of 3-D Secure with friction-free checkout for your buyers. One Connection to Cardinal drives digital commerce. Download the brochure now.