Originally, disputes were built to protect the buyer. These days, however, the idea of accumulating reverse charges poses a significant danger to businesses.
Chargebacks are inevitable and often exceed the merchant’s expectations. Excessive rates can take a toll on your credibility, credit background, and customer loyalty. Add that to the increasing favoritism for buyers, and the situation is bottom-line threatening for merchants.
But not knowing how to handle disputes is the perfect recipe for disaster because it may mean losing even in conflicts that you’d have otherwise won.
The truth is some reverse charges are unnecessary. In its place, a money-back can solve the problem. Studies show 5 percent of chargebacks happen when clients are unhappy with a service or item, and another 5 percent because the item didn’t match the product details listed on the site.
Only a few claims are fair. Most chargebacks are the result of transactions initiated via a stolen credit card. The wrong product or not-received orders may also trigger disputes.
Excess chargebacks can lead to extreme consequences like merchant account termination; that’s why business owners must pay attention to them.
Understanding Reverse charges/Chargebacks
A reverse charge happens when a customer reaches out to their credit card company demanding their money back for an item not received or isn’t satisfying, or they never really bought.
When a buyer files a chargeback with their credit card firm, the merchant receives a notice from the Acquiring Company. The merchant then gives the vital details so the acquirer can refute or confirm a fraudulent payment.
How to Prevent Chargebacks & Win
Merchants can reduce chargeback rates through the following techniques;
- Issue quick refunds where valid.
- Offer unswerving customer support. Do not ignore customers.
- Spot and fight chargebacks before they happen.
- Keep records of all communications to increase the likelihood of winning in disputes.
- Confirm all orders to avoid unfulfilled orders.
Partnering with a payment partner who understands your chargeback problems can increase the likelihood of winning.
The best payment providers feature in-built fraud-protection filters and tracking tools that monitor customer habits blocking any suspicious activity in real-time.
Chargeback tools thwart any fraudulent activity before it happens, reducing the number of cases filed against your business and, ultimately, the chargeback levels.
Take a proactive approach to chargebacks to protect your business from further losses accumulated from reverse charges.