How to Cut Back On Chargebacks

Sep 08, 2016

Chargebacks can have greatly damaging impact on your bottom-line. The costs tend to spike and there’s little you can do to push away the charge once it has been applied on your business. The best alternative is therefore to work out a chargeback prevention strategy rather than waiting to deal with it after it has already been applied. Here are some steps you can take to help you reduce chargeback.

  1. Communicate upfront

Some chargeback cases happen because the customer does not understand your product and only come to realize something is amiss after a transaction. It’s simple to avoid such an event. Let the customer fully understand all the costs that will be involved in the purchase of an item. Be sure to communicate with customers clearly so they fully understand your product alongside the costs and other processes that might be involved during the purchase.

Statistics indicate that well over 86 percent of customers often don’t contact merchants beforehand when they initiate a chargeback with the credit card company. Providing customers with all information upfront regarding what to expect of the credit card bill will therefore help a great deal.

  1. Respond to requests quickly

Customers tend to be impatient where their bills are involved. If you make it easier for customers to contact you in case something goes wrong then they will in most cases do so before they contact their credit card company.

It’s important to let the customer know beforehand how to get in touch with your customer service team in case an issue arises. Have your customer service team well informed and readily accessible through a variety of means such as phone, email and/or chat function on the business website. The easier it is for the customer to have the issue resolved the less the chances of the customer contacting the credit card company for the same.

  1. Avoid fraudulent transactions

Credit card fraud is a major cause of chargebacks on businesses today. They can take place in the form of card-not-present (CNP) transactions. It is possible however to safeguard your business from such fraud. In addition to the common methods like the use of a professional anti-fraud service and checking of customer details with the card-issuing bank, some payment processors such as EMB actually use extra verification and advanced security steps as a fraud and eventually chargeback prevention strategy.

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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 on 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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