If there is something disappointing to a merchant, it is when customers demand a chargeback. Whether the complaint is malicious and not issued, merchants are not always lucky because they must part with some processing fee. In cases where chargebacks are abused, they are an injustice. Nonetheless, they can be avoided if a number of preventative steps are done.
For CP (card present) merchants, it is important to have the card swiped via the magnetic card reader. The transaction should then be completed once the appropriate authorization has been received.
It is also important to ensure your customers have provided some signature on the sales slips so that you can avoid “no-signature” kind of chargeback. This mostly happens if the customer claims he was not around when the sale was taking place.
Embossed cards are also chargeback minters. In case you realize authorization is not possible as a result of inability to read the magnetic strip for one reason or the other, look for manual Imprinters to add the card information manually so that the sales receipt can have the card number embossed on it. Sometimes, the card might not be embossed but printed and you can avoid adding the information in case of validation failure; there is nothing that can be done to determine the card’s presence. You might want to ask if other payment methods are acceptable, especially checks and cash.
Disclosures to the customer
It is also important to disclose all your merchant policies with a special stress on returns and refunds to the customer, clearly. If you do not reveal all the policies or if you utilize misleading information, especially while promoting your products, be ready for a flood of chargebacks from angry and unsatisfied customers.
Deliver and charge thereafter
For card not present (CNP) merchants like online service providers or retailers, address verification can be used; at the same time, obtain from all transactions the CVV2 code. Before the product has been shipped, it is not wise to deposit the transaction since customers are not patient when their accounts are charged for a product yet to be received. This is a huge problem and usually leads to serious chargebacks and loss of potential long-term customers.
It is also very important to ensure customer complaints concerning the service or product has been dealt with fast and professionally. This should be a part of your business policy. You will find that, product replacement or direct customer refunds are much better than facing the wrath of one too many chargebacks.
Update your customer
From time to time, the shipping can face some delays or the product bought might be out of stock. In such an instance, you are better of telling the customer what is happening immediately. You can give them the choice to either buy another similar commodity of the same value or cancel the entire order. The worst thing you can do is shipping different, yet similar products to the customers without letting them know or allowing them to choose for themselves.
At the same time, learn all you can about customer behavior and unusual orders to effectively protect your business from chargeback rackets. Always know why your customers file chargebacks and you will be able to prepare accordingly.
These are some of the reasons to get a high risk merchant account to avoid chargebacks.