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Best Ways to Prevent Chargebacks from Destroying Profits

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.