What to Know About Chargebacks? How to Avoid Them and How to Win Them?

E-commerce serves to be essentially a form of chargeback minefield. With every CNP transaction, there are opportunities for deliberate scams, frauds, impulse purchases to regret later, and several other problem-based shopping situations that could result in the chargeback on the respective merchant profile. If a myriad of disputes keep coming up your way, you might receive the notice or end up in the match list.

What can you do to stop chargebacks? When you follow the best practices for ensuring that your customers are happy, the records that you have are thorough, your business is well-prepared to push back against any type of chargeback fraud.

It is important to note that online shopping turns out to be the lifeline of a majority of merchants out there. In-person transactions are capable of weeding out the majority of erroneous or illegitimate purchases. Still, shutting down the overall online sales does not turn out to be the right option. Then, what should you do to fight & win chargebacks?

If you are learning about ways to avoid or fight chargebacks, here are some effective ways to know about:

  • Follow Proper Payment Processing Protocols: Every card processing network out there has proper protocols when it comes to handling CNP or Card-not-present transactions. You might be required to obtain information like the IP address of the customers for ensuring CVV and AVS verifications. When you tend to follow the right protocols, it will help you in eliminating fraudulent transactions before they get completed. If you tend to ignore the same, it would result in the respective card network to rule against you automatically –especially in case of the chargeback dispute.

 

  • Utilize Reliable Payment Descriptors: One of the most common forms of friendly frauds is when the customer will not recognize the transaction on the respective credit card statement. At the same time, the customers would immediately report the same to the respective bank in the form of some suspicious charge. 

 

Even when they would realize that it is a form of charge that they are making, it might become too late when it comes to keeping the chargeback from getting recorded against the merchant account. Ensure that the payment descriptions are totally identifiable to the customers. For instance, if you are doing business under more than a single name, ensure that the company name on the respective payment description should match the online storefront’s name. It is important to ensure that the description has the working contact number such that customers have the opportunity to contact you before going to the respective bank.

 

  • Providing Excellent Customer Services: The best way of keeping the customer complaint from getting converted into the chargeback is by encouraging customers to resolve the problems directly with you rather than going to the bank for disputing the charge. In almost every type of scenario out there, a direct form of refund would cost you less in comparison to the chargeback. 

 

Online-based subscription services tend to be particularly susceptible to fraud chargebacks that are friendly. Most of the customers out there tend to forget canceling subscriptions before the expiration of the free trial memberships. Otherwise, they would allow unused subscriptions to run for a longer time. Then, they would panic and rush to the respective banks for trying and getting several months of charges back –all at once. 

 

Try reaching out to the customers for keeping subscriptions on the respective radars –making it easier to cancel the overall subscriptions. It is also recommended to be generous when you are giving out refunds to the customers who would be canceling subscriptions that they might not have used in several months. By making use of amazing customer services, you can observe fewer similar situations turning into chargebacks.

 

  • Verifying Suspicious Orders with Measures Related to Fraud Prevention: Most of the online orders out there tend to be deliberate attempts at card theft or fraud will be featuring red flags that you can easily spot when you are paying attention. Orders coming from foreign countries –particularly the ones wherein credit card fraud tends to be prevalent, should be scrutinized carefully. This is because these are often capable of hiding e-commerce security threats. 

 

In most cases, large orders or something that might not fall under the normal category in your business type, should be given a second glance. Several failed attempts of an order from a single IP address or customer should serve as a major indicator of someone who might be making an attempt to ensure the purchase with the help of stolen cards. In case you feel that there is something shady with respect to a particular order, then you should aim at contacting the customer for confirming the respective intentions while also verifying the respective address & card information. 

 

  • Maintaining Excellent Records: It is important to ensure proper backups as well as records of all the data that you would collect during the placement of an online order. In case you would be fighting for the chargeback, the given information can turn out immensely useful when you wish to ensure that the given transaction was legitimate and properly executed.

 

  • Making Policies Transparent & Visible to the Customers: Be assured of the fact that your online ordering system has been set up such that your customers will get all relevant opportunity to go through the respective exchange, return, and other important policies before confirming the ongoing purchase. When you are completely upfront & transparent about the respective policies, it can help in preventing frustration and confusion for the customers. At the same time, it can also help your proper case in case you are contesting for the chargeback.

 

Chargebacks are easily preventable when you have the right tools in place. Alerts related to chargeback prevention can help in stopping transactional disputes from converting into chargebacks as it would temporarily pause the given chargeback. As you would also determine the root cause of the chargeback, it will help in revealing operational inefficiencies that your business would have. 

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