"Chargeback" is a term used to describe when a customer disputes a charge on his or her bill. This typically happens when a customer doesn't recognize a charge, the customer is double-billed or charged the wrong amount, or the customer is dissatisfied with the merchandise or service.
Chargebacks can be costly for merchants, so it's important to minimize them as much as possible. We thought we'd share 5 steps you can take NOW to help prevent chargebacks over the busy holiday shopping season. These chargeback prevention tips can be classified in two categories: 1) proactive; and 2) reactive. We recommend the proactive steps first so you can prevent the customer from initiating the chargeback in the first place.
- Post Your Return Policy and Make it Easy to Find
Your return policy is your best friend when it comes to preventing chargebacks. Make sure it is very clear and it is easy to find on your website and in your store. Your return policy is also part of your defense when you have to dispute a chargeback claim, so if you don't already have something in writing, make sure you create one before the holiday shopping season starts. - Provide Excellent Customer Service
Holiday shopping can be frantic for both merchants and consumers. Merchants are busy beyond capacity at times. Consumers are in a hurry, purchasing products/gifts they wouldn't normally buy, and making lots of impulse buys. Both scenarios can lead to customer service issues and chargebacks.
Most consumers will contact the merchant to resolve a dispute first, then initiate a chargeback if he or she doesn't receive assistance or a refund from the merchant. When contacted by one of your customers regarding dissatifaction with a product, be prompt in responding to the customer and attemp to resolve the dispute. Refunding a customer's money up front could actually cost you less than losing a chargeback dispute down the road. - Communicate with Customers
This is especially important for online merchants. Let your customer know when his or her order is expected to ship and how long the shipping will take. If you have an item out of stock or on back-order, let the customer know immediately. - Practice Truth in Advertising
If you are running deep holiday deals and specials, make sure the terms are clear so you don't surprise your customer. If you run out of a particular item that was on sale, do not substitute another item in its place without the consent of your customer. Surprises lead to chargebacks. Avoid surprises at all costs. - Use Best Practices When Processing Credit Cards
This means swipe the card when possible, get a signature, and verify the signature. If you are online merchant, use address verification and CVV/CVC codes. A short training session with your employees ahead of the holiday shopping rush can help you avoid unnecessary chargebacks.
About Novera Payment Solutions
Novera Payment Solutions is a leader in the credit card payments industry. We are committed to helping businesses improve their bottom line by providing significant savings on credit card processing fees through our innovative and trasparent flat fee merchant account pricing models. We are confident we can save your business money on credit card processing fees!