Ways to Use eContracts to Dramatically Lower Chargebacks

Mar 30, 2018

An electronic contract, or as a millennial would call it, eContract is a contract a merchant sends to a buyer electronically, more like AdobeSign. You don’t want to miss out on the many benefits of this service. Having a shopper sign an eContract before releasing a product or offering a service can help explain the product or service, increase merchant chargeback protection, define your terms of payment and protect you from legal issues.

Though the merchant often looses in these chargeback cases, using eContracts will significantly perk up your chances of winning. In a nutshell, an electronic contract means you’ve adequately explained your good or service plus the terms of the agreement, and most times, the customer will have no substantial defense against you. Just make sure you construct it to perfection.

In fact, electronic Contracts can boost your likelihood of winning a chargeback dispute from the industry’s 30% to around 90%.

Here’s a guide to the things you need to do to make the most of your eContracts.

1. Explain the Purchase Process in Detail

Your electronic Contract should explain in depth the exact price of the item or service, associated fees, taxes, cost of shipping plus any recurring charges. Ideally, the customer should understand what they are paying for; and your credit card issuer should clearly make sense out of your regulations when going through eContract in the event of a dispute.

Breaking down the purchase process is essential because sometimes buyers forget the cost of a particular item or service and claim an overcharge. Putting it on paper and ensuring the customer signs it will give you an upper hand during a chargeback dispute.

2. Acquire Proof that the eContract reached the Client

That copy of your eContract is only helpful if the merchant receives, goes through and signs it. It’s no wonder the eContract software should list on the signed contract the email and/or IP address, the buyer’s electronic signature plus the date & time of the eSignature.

The electronic proof will help you win disputes against the group of shoppers that claim not to have seen a copy of the eContract or at least a receipt.

 3. State the Credit Card type used for a transaction on your eContract

An eContract should prominently display the card type (Visa, Discover, MasterCard, AmEx) together with its last four digits, and its expiration date. Doing so is helpful because by spotting which card was used without disclosing sensitive client data can minimize the chances of you facing a “card not authorized” chargeback dispute.

4. List your full Refund Policy On the eContract

Don’t only list your refund policy on the company website, but also have it discussed at length in your eContract. Including it solely on your site won’t protect you in the scenario a customer claims to have been insufficiently informed of the refund policies. We’ve seen thousands of merchants refund clients they shouldn’t have for merely not prominently displaying their policies.

To make sure you don’t lose a chargeback dispute, include your return policy on your website’s order page but also have it displayed on the electronic contract that a buyer signs. In the policy, mention the time limit, terms and conditions and any restocking fees, that will apply for a successful return.

The Bottom Line

Effective use of eContracts can help you reduce the chargeback rates by almost half in you firm.

 

 

*Chargeback Shield is not an insurance service. EMB does not sell insurance and Chargeback Shield is not insurance, it is an alert system.

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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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