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Protecting Your eCommerce High-risk from Reverse Charges

Taking credit card payments is the order of things when it comes to online customer-retailer relations.

And to be able to accept cards, debit or credit, you must have access to a merchant account. Normal businesses will find many willing merchant account providers but those classified as high-risk for one reason or another must hassle hard or look in the right place to start processing online payments.

Understanding High-Risk Merchant Accounts

A company or business could be listed as high-risk for many reasons, but it often comes down to two main reasons.

  • High chargeback rates, meaning your business initiates many reverse payments due to customer claims
  • Selling highly-controlled goods or services such as e-cigarettes and adult content.

These accounts usually come with higher fees than standard accounts and their providers take these measures to protect their bottom line in case you run out of business and liquidate.

Because the payment processor and account provider carry most of the risk in each payment, they charge businesses sky-high premiums on top of interchange fees—that goes to card networks.

We know chargebacks are a sticking point when it comes to high-risk sectors. Yet every business must keep reverse charges to a minimum to remain profitable.

But how do you go about it?

Reducing Reverse Charges in Your High-risk Business

Merchants can follow the following tips to trim down the cases of chargebacks in their e-commerce premises.

Transparency is key

Unclear, incomplete and misguided product or service descriptions are the common reasons most businesses receive many reverse charge requests.

Obvious at it seems, many brands leave details that customers use as excuses to file chargeback claims. Be as detailed about your products as possible.

Provide all sorts of informative content to enlighten your customer base. The more people know, the better purchase choices they make, and the lesser the possibilities of filing chargeback claims.

Stick to Your Official Merchant or Business Name

Use your official merchant or business name in your transactions and across all contact points with customers.

This is the name shoppers see on their credit card report. If it is stranger than they expect, they may file a reverse charge request and raise claims that they don’t recognize the company behind the charge.

Pay attention to detail

Detail is key in detecting reverse charge fraud because of the long-distance shopper-merchant relationship.

CNP fraud is common, and so are chargebacks rates because the business owner does not inquire more to see the person behind the purchase.

Look into all verifying details and add several reasonable layers of authentication to stay safe.

Wrapping Up

Protecting your business from reverse charges is a continuous process. The merchant’s role is to check the possible cause and take corrective measures.