Best Ways to Prevent Chargebacks from Destroying Profits

May 11, 2015

Chargebacks happen when your customers dispute a particular credit card transaction on their account. Chargebacks are dangerous, because 58% of the time merchants are not informed that a previous customer is disputing a purchase until the chargeback has occurred. This means that merchants are unable to investigate or challenge fraudulent chargebacks that not only refund the sale but cause excessive fees. Merchants can lose up to $270 in fees per every $100 chargeback. This means that customers and banks are costing businesses hundreds to thousands of dollars a year.

Preventing Chargebacks if you accept credit cards isn’t always easy, but there are a few policies and processes that the best in the industry utilize to decrease the deadly impact that chargebacks can have on your business.

Post the Return Policy in a Visible Location

Some merchants hide their return policies as if they are not important. If the policy is placed prominently and on several pages of your website, then it can prevent a large amount of chargebacks that are the result of non-fraudulent issues.

Communication is Key

Institute a tracking program that lets consumers know when their merchandise will arrive or notifies them about any delays. This will prevent any misunderstandings about delivery that can lead to chargebacks. Make communication at the help desk your main priority, as when consumers have disputes they generally call the merchant first, before filing a chargeback. It is this exchange with the customer service desk that must be productive and resolve customer issues to prevent chargebacks.

Tell the Truth

Many consumers initiate chargebacks if they believe the item purchased does not work as advertised. They may feel gipped, and refuse to speak to merchants if they are angry. Always include truthful descriptions of items. Include disclaimers along with positive and negative reviews. This way consumers will have an accurate expectation of the product or service, and will be less likely to feel misled if the product doesn’t perform well.

The eMerchantBroker Chargeback Suite

eMerchantBroker has created fast and effective merchant solutions that have made them one of the nation’s leading chargeback insurance providers. Their chargeback suite reduces the amount of chargebacks by 15-30% per year. Call us at 1-800-621-4893 to learn more about this fantastic suite.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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