How To Prevent Chargebacks Like A Pro
If you're going to take payments online, eventually you're going to run into problems with chargebacks. Some businesses may think they are immune from disputes, but banks and credit card companies have a process in place which allows cardholders to file a chargeback. Cardholders may file a chargeback if they don't recognize the transaction or if they believe they were charged too much, or even if they feel they didn't authorize the purchase. This can be a nightmare for ecommerce merchants. A chargeback is designed to give consumers confidence in using their debit or credit card to make a purchase. On the downside, you are stuck with the financial obligation of the dispute, and this process can also affect your reputation.
So what do you do? Is there a way that your business can protect itself from these disputes? Is there a way to avoid them all together? These are difficult scenarios for a business to face alone; but what if you didn't have to face them alone? In this blog, we will cover what a chargeback prevention platform does and what it can do for your business. Like anything else, seeking advice from an expert can really make a difference to your business. But first, let's start with an important question. Why is it important to avoid chargebacks?
There is nothing fun about getting a chargeback. You can't convince business owners otherwise. Even worse, there are some additional issues that can happen when you receive disputes consistently against your business:
- You can draw unwanted attention to yourself from your payment provider. Having too high of a dispute-to-sale ratio can cause your business to undergo a dreaded risk review. This can cause your payment provider to add a reserve percentage to your account where your funds can be held, or they can close out your account entirely.
- Your margins decrease as your costs increase. Let’s not forget that disputes can result in both lost income and even lost products to your business. This can hurt your bottom line and even cause your business to have to make some hard decisions about your operating expenses. Your business should aim to make a profit off of every expense. Lost profit is the worst thing that can happen to your business and should be taken very seriously.
- Your business is limited. Getting tied down dealing with disputes that require responses and having to investigate each further can take time away from your operations. Getting to the source of the problem and any efforts made to increase the chances of winning the dispute are essential to keeping your business running smoothly. It's always a good idea to make sure that activities that aren't bringing money into your business don't happen again.
- Your reputation can be negatively effective. Customer complaints and disputes can hurt your reputation as a business owner, making you look like a scam artist or bad business owner. Take the time to handle disputes properly so you can keep the peace and protect your business from damage.
But not all hope is lost. There are many things that can help you reduce the amount of disputes you have, from the way you communicate with customers to the way you run your business. Here are some tips for reducing disputes:
- You can use fraud detection tools to identify suspicious activities as soon as possible so you can stop them before they become an issue. Check with your payment processor, but these tools typically range from CVV (Card Verification Value), AVS (Address Verification Service) and 3D secure.
- You can optimize your customer service by providing accurate and honest information about returns or exchanges. This will help your customers feel like their concerns are being heard and addressed. This can help you develop a relationship of mutual trust with your customers.
- Streamline fulfillment by making sure all products are accurately described on your website and shipped quickly so there's less chance of confusion between what your customers order and what arrives.
- And finally, optimize billing descriptors by including clear descriptions on invoices that explain exactly what each charge is for. This will help you avoid disputes later on, when everyone's memory of the purchase fades.
While all these tools can help decrease the chance of a customer filing a dispute, there will still be cases where your customer will file a chargeback against your business. This proves to ask an important question; what is more important, chargeback prevention or chargeback representment?
Here's what the experts at Chargebacks911 had to say:
"Chargeback prevention and chargeback representment are really two different aspects of the same process. Both are equally important. Merchants are encouraged to engage in tactical representment to recover revenue and prevent losses in the short term, while taking steps to manage risk and prevent chargeback issuances in the long term.
All chargebacks can be traced to one of three fundamental sources: merchant error, third-party (criminal) fraud, or first-party (friendly) fraud. Merchants should fight first-party fraud through representment, then deploy the best practices to prevent chargebacks resulting from error or third-party fraud. This is the key to an ongoing, successful strategy."
With this in mind, all business owners can agree; disputes need proper attention and require expertise. So what can you expect when you decide to go with a chargeback prevention platform? Here’s what the experts from Chargebacks911 had to say:
"Seeking help from a third-party specialist will typically save merchants a lot of time and money in the long run.
Chargeback management is a complex process. It relies on in-depth analysis to detect patterns in buyer behaviors and chargeback issuances, which must be based on a large body of data. In addition, in-house chargeback management also requires that merchants keep pace with constant changes in industry rules and procedures. Rules and processes can vary significantly from one card network to the next, so there's no real consistency there.
The average merchant simply doesn't have the bandwidth necessary to do all this on their own. By seeking help with chargeback management and prevention, though, merchants gain access to a much deeper pool of insights and data. They can detect and eliminate chargebacks according to their source, and focus their time and resources elsewhere.
Merchants can expect to see an immediate increase in revenue, as more effective representments help defend their sales against first-party fraud. In the mid- to long-term, merchants can expect to see fewer chargeback issuances and better relationships with banks. They can reallocate staff and reduce costs, letting them focus attention on growing the business, rather than fighting to keep past sales.
Finally and most importantly, they will have more peace of mind, as they can project future revenue without worrying about chargebacks impacting their bottom line. They can plan and develop strategies for future growth and success."
Chargebacks are an unfortunate, but necessary part of doing business. They ensure accountability, encourage fairness, and they keep the marketplace free of unscrupulous business practices. The path to recovery from chargebacks isn’t easy, but it’s possible. Partnering with the right provider can help your business overcome challenges, draw on best practices, and achieve long-term success. You can’t afford to let chargebacks go unchecked. If you want to protect your profits and stay in business, it’s time to get help from a company that knows the ins and outs of the payment processing industry.
Redde Payments + Chargebacks911 is the best way to process your payment and to tackle your disputes head on. Redde's team of experts are equipped to help you process your transactions quickly, efficiently and without delay. Chargebacks911 knows all about chargebacks, and they're ready to defend you against disputes, the right way. Avoid these costly mistakes and reap the rewards of a healthy bottom line. Redde Payments + Chargebacks911 is here to help, get signed up with us today for better payments and better chargeback solutions.