5 Tips to Avoid Chargebacks

Written by Business magazine. Posted in Card not present fraud prevention, Merchant credit card processing, Payment processing services

Merchant

More and more people are buying things online. E-commerce generates more than $931,000 every 30 seconds from computers and nearly $270,000 worldwide. Moreover people tend to spend more when shopping online than in traditional brick and mortar stores. The average American online purchase is for about $80. When people shop online, may know exactly what they are going to get and where they are going to get it. Nearly half (48%) say they have decided these two things before they go online to buy it. Most of this shopping online is done with a credit or debit card making it critical that e-commerce sites have a good merchant payment gateway company. This is crucial for providing stores with chargeback protection for ecommerce.

Chargeback is the term used when a customer disputes a claim on their credit card statements. There are ways you can protect yourself from these. It is vitally important that you do what you can to reduce the numbers of chargeback complaints against your company. You end up losing the amount of the sale, you are often charged a fee from the credit card company and it can damage your reputation with your merchant payment gateway provider.

5 Tips to Help You Protect Yourself from Chargebacks:

Make sure the customer knows what name will be on their bill. The easiest thing to do is have your name be the same as what shows up on a person’s credit card bill. If this is not possible, say you run a branch of a larger company. The larger company’s name appears on the credit card statement and that is different from your name. So, your customer gets their bill and they see a charge that they do not recognize, they understandably call the credit card company to complain. What you need to do is let your customers know their bill will show a different name.

Provide your customers with great service. Generally, credit card companies will give you a notice that a customer has questioned a charge from you. If you know this is a case if mistake identity, call the customer and see if you can work it out. Even if your customer had another issue with the bill, contacting them can help you straighten out any confusion. If they ordered from you and hated the product they received, maybe you can work something with the customer and they will let their credit card company know the problem has been resolved.

Use a good merchant payment gateway. If you use a reliable merchant payment gateway you can often prevent chargebacks. This is because they have great methods to prevent fraudulent use of credit cards. By cutting down on these fraudulent use of credit cards by thieves, you can save yourself a lot of hassle. This is very important for ecommerce transactions where the customer is not in front of you with their credit card.

Train your employees to recognize fraud. If you have a brick and mortar store, you can pay attention to customers. If you are very attentive, that alone may stop a person from using a credit card that is not their own. Always check, and have your staff, check the signature against the signature on the card. Credit card companies assume this happens but in reality, it rarely does. Some cards also have photo of the card holder, compare that if it does. There are things you can do in a store to make sure the cards you take for payments belong to the person whose name is on the card.

What about customers who claim they never ordered or received an item when they did? If you run an ecommerce site, it is almost impossible to prove that a customer ordered and received something when they say they did not. These charges are hard to dispute and often you have to eat both the cost of the transaction and any fee.

Chargebacks are bad for business and some cannot be avoided. You can limit the number of chargebacks you get by following these tips. You can also train your employees to spot fraudulent purchases in your store and take some steps to verify online purchases.

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