In this post, I will describe four ways which merchants can alleviate the burden of chargebacks.
4 Ways to Reduce Credit Card Chargebacks
Streamline transport operations. Fast shipping is essential for many merchants, but especially for direct marketers, infomercial merchants, network marketers, and multilevel marketers. Purchasing from these firms is mainly impulse-driven, driven by attention-grabbing advertisements. So making a customer wait to get his things can increase return and chargeback prices.
Reduce your time to boat and you will reduce the amount of time that you give clients to change their minds. It’s that easy. A product which takes weeks to ship will typically experience more chargebacks.
Alternatively, merchants offering same-day delivery or next- or expedited shipping visit fewer chargebacks, usually. These merchants discovered what ought to be obvious: Give customers what they need, when they need it. Clients want the thing when they place the order, not weeks later.
Emphasize customer service. Ecommerce is increasingly competitive. Shopping cart platforms are cheap and sophisticated, facilitating thousands of new sellers. It’s customer service which often separates the successful sellers.
The days of automatic voicemail systems or just listing frequently asked questions on an ecommerce website are over. Shoppers expect to talk to a live person who can answer their questions satisfactorily and quickly. Merchants should provide live, always-on support. The more support and service, the fewer buying mistakes by shoppers, who might then initiate chargebacks.
Boosting customer support capacities may require an investment, but the long-term outcomes of lower chargebacks and greater revenue can be well worth it.
Simplify cancellations and returns. It may seem counterintuitive, but providing a simple cancellation and return policy helps prevent chargebacks, and the penalties and penalties that accompany them. Returns are less costly than chargebacks, in other words.
Consider the following measures to minimize returns and cancellations:
- Have a clear, concise, and easy-to-follow coverage for what could be returned (or cancelled) and the procedure for doing it.
- Don’t harass clients who wish to return products. Educate your customer service representatives to be considerate and accommodating, and also to prevent high-pressure tactics to dissuade clients from completing the return or cancellation.
- Prominently display your return and cancellation policy on your site and on the invoice that is shipped with the product.
Use fraud prevention tools. Sometimes chargebacks are caused by authentic fraud, where criminals use fraudulently obtained credit card information to create a purchase. Guard against fraudulent chargebacks using a suite of fraud prevention tools which make sense for your company.
Fraud prevention tools may vary among merchants. They aren’t one-size-fits-all. Merchants can work with their payment processor or other adviser to find the best combination of resources to their organization.
These tools could include:
- Anti-fraud databases. These databases alert merchants of (a) questionable ordering activity triggered by botnets — a network of malicious servers, (b) credit card numbers which were associated with previous fraud, (c) fast orders with multiple credit card numbers, and (d) geographic inconsistencies with the computer used for purchase and in which the user claims to be.
- Chargeback notifications. Some solution providers, such as Verifi and others, offer alarms or alarms when a chargeback is initiated, providing the merchant time to solve the dispute with the cardholder as opposed to navigating through the convoluted chargeback procedure.
- Card security codes. By validating the card security code (the 3 digits on the back of Visa, Mastercard, and Discover cards and the 4 digits on the front of American Express cards), merchants can help confirm that the individual making the purchase is in actual possession of the credit card.