4 Ways To Prevent Chargebacks

4 Ways To Prevent Chargebacks

Chargebacks are a way for credit cardholders to dispute merchant charges and combat fraud. You need to proactively reduce the amount of them you receive because too many legitimate ones can hurt revenue and reputation, while illegitimate ones hurt your business even more severely. Here are 4 ways to do just that.

  1. Keep Transaction Records

Keeping detailed records is one of the simplest ways to help prevent chargebacks. Include emails and other records of communication with your customer and shipper, as well as contracts, purchase orders, receipts and shipping confirmations. Detailed records provide evidence in case you need to dispute a chargeback, and allow you to review purchases and customer interactions, which can go a long way toward chargeback prevention. You should also keep multiple copies of any records for seven years or more.

  1. Leverage Best Practices for Fraud Prevention

Because fraud is the most common cause cited for chargebacks, preventing fraud is key to preventing chargebacks. There are several industry best practices you can implement in order to prevent chargebacks and fraud. Comply with all requirements for point-of-sale systems, require customers to input their card security codes and verify billing with address verification systems for online shopping. For in-person purchases, you can require associates check cards for signatures and expiration dates, as well as check for any damage or tampering to the card.

  1. Make Your Returns and Refund Policies Clear

You need to ensure your customers can easily understand your policies for returns and refunds. Providing fast refunds or returns, making the instructions for such exchanges clear and making it easy for customers to contact your customer service department can all aid in chargeback prevention. If it’s easy to get in touch for any questions and to take care of a refund or return, customers are far less likely to kickstart a chargeback. On the policy, explain the options available to the customer if he or she is dissatisfied, as well as the length of time he or she has to return or ask for a refund.

  1. Have a Recognizable Billing Descriptor

A billing descriptor is the seller name on a billing statement. You must make sure your billing descriptor is easily recognizable and matches your company name. This way, customers will be more likely to recognize the charge to their cards from your company and less likely to kickstart a chargeback.

These methods can help you minimize the need for legitimate chargebacks and prevent illegitimate chargebacks.

 

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