The Small Steps to Take to Reduce Chargebacks

Feb 12, 2014

To put it simply, a “chargeback” is a reverse transaction. When a customer does business with a merchant and then disputes that payment, he or she is then issued something like a refund, in which the money will come out of the merchants’ account and back into the customers’. The sneaky aspect of this process is known as a chargeback. When the money is withdrawn from the merchant’s account, the consumers’ credit card company will issue a “chargeback fee”. This is every merchant’s worst nightmare, particularly if chargebacks are to happen often, in which the merchant is likely to lose a ton of money. Below are a few useful tips to follow for both card present and card, not present transactions, to take back control and reduce chargebacks in your business.

What to do in Card Present Transactions

A “card present transaction” is quite simply to process a transaction in which the customer is present at the time. It is important to always verify the customer’s identity; if their signature is not written on the back of the card, always ask to see a form of identification. Not only this, but it’s essential to verify the expiration date on the card and check for the security hologram on the card. When a receipt of payment is printed, match the information such as name and account number to that on the customer’s card.

What to do in Card Not Present Transactions

A “card not present” transaction occurs when the customer is not present at the time of the transaction e.g. online transactions or over the telephone. Always ask the customer for the credit card’s expiration date, and verify the 3-digit card security code (also known as CSC or CVD). Also, use the address verification system to verify that the customer’s address is the same on both the order form and the billing address of the card. It is a fact that not using this system will usually result in higher processing fees.

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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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