A chargeback happens when buyers contact their credit card provider and dispute charges to their accounts. The seller gets debited the charge amount plus an extra cost known as the chargeback fee. But, sellers are allowed to defend the charge. However, if the dispute is ruled in favor of the buyer, you lose the funds for good. Chargebacks are among the riskiest side of business. They can be frustrating, not to mention the stress they cause merchants monthly, weekly, and daily. The good news is that you can avoid chargebacks in your merchant business through these suggestions.
Match Product Descriptions
Chargeback disputes often occur when product descriptions don’t meet the expectations of the goods. Sometimes this mistake is not intentional. However, you need to be clear when making the descriptions to make sure that they match the products. It’s an effective chargeback protection tip that can save you a lot of money. A chargeback will most likely happen when your product descriptions are not clear.
You need to have a written and visible return policy. Make sure that your customers can see your return policy before they accept payments. Also, make sure that you write the return policy in plain language. Sometimes a customer may request a chargeback with the misconception that your business doesn’t refund directly. It’s also wise to respond to refunds promptly to avoid excessive chargebacks that result in high processing fees.
Another effective way of protecting your business from chargebacks is by using fraud filters, such as those offered by Ethoca. You can find several fraud filters in the market. For instance, some filters require a cardholder to include billing address and card information when making a payment. The address is usually compared to the back records, and a code is assigned. Another verification method is one that entails the three-digit security code on the back of credit cards.
It’s important to understand whether your business is at risk of chargebacks. In reality, every company that accepts credit cards is at a higher risk of chargebacks. For instance, online sellers and sellers that handle high-risk products, such as luxury goods and tech gadgets, are at higher risks. That means that if you sell these types of products you will want to take extra measures to ensure your company isn’t vulnerable.
In today’s world, chargebacks are a common part of business. Fortunately, the above measures can protect your business from chargeback disputes. Remember also to understand how chargebacks happen for more effortless protection.