How to Avoid Common Chargeback Mistakes

Oct 12, 2018

Chargebacks are a merchant’s worse nightmare. They not only eat away at your time and energy, but they seriously chip away at your business’ bottom line. Chargebacks are one of those things to try to avoid at all costs. If chargebacks are a big concern and issue for your business, consider the following ways you can handle customer disputes and keep your business operating smoothly.

React Fast

Timing is everything when it comes to fighting chargebacks. The timing of your initial response is really important. Quickly reaching out to your customer and keeping them updated makes a big difference. It might also help to resolve the dispute by providing a detailed description of your products or services. In many cases, customers will reach out and contact an online store before filing a chargeback. The key is to keep contact information visible on your site and on your checkout page.

Go over the reason codes

Many business owners overlook the importance of knowing reason codes. As a merchant, you have the right to fight disputes. So, make sure you go the extra mile to dispute them when necessary, especially when your 100% sure that you can provide the disputed transactions are legitimate. Keep in mind that it is really hard to win a dispute without strong knowledge of chargeback reason codes (also known as dispute codes). Make sure you go over and know the reason codes because each code has its own evidence that needs to be compiled. Tip: keep the list of required compelling evidence close by to increase your chances of success.

Make sure you’re really prepared

Another big mistake, some merchants wait until they see a dispute to seek ways to fight the chargeback. You need to always be prepared and have all the tracing procedures in place; this includes having a transparent and concise terms and conditions and a clear refund policy that is visible on your website. To raise your chances of preventing chargebacks, you have to make sure you keep your customers informed. Tip: in some cases, it is much easier to refund the money than fight the chargeback.

Regularly check evidence

Before you reply to a chargeback, you will need to fully document everything. This includes tracking your customers’ activity, analyzing their behavior and keeping logs in the system. While it’s important to look over your evidence before submitting it, don’t wait too long – the faster, the better. When you’re ready, gather all the documentation and send it all at once (e.g. a single PDF file). Tip: the clearer and more structured the documentation, the greater chance you have of winning the dispute.

Watch out for red flags

There are many reasons for chargebacks. Some customers file chargebacks instead of calling or emailing the online seller. Others are just lazy, forgot their password or just don’t care. Every dispute should be investigated. Tip: work with a payment processor like emerchantbroker.com that will help you fight against chargebacks and watch out for red flags.

Find support to prevent chargebacks

Above all, make sure the payment processor you’re working with has anti-fraud tools and a well-designed chargeback process in place. Our team at emerchantbroker.com, for example, offers chargeback protection and prevention programs built on a foundation of years of experience. The application process can be completed in a matter of minutes, and your account setup in as little as 24 hours.

Keeping these tips in mind will help you fight fraud, save yourself some time and ensure your have processes in place when a chargeback does occur. Need help preventing chargebacks? Contact our team to find out more about how to prevent chargebacks and our chargeback protection.

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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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