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Know about Credit Card Chargeback in Detail

A chargeback happens when a customer disputes a vendor’s charge against their account. Chargebacks are unavoidable but if you take precautions, you can prevent them.

Credit Card Chargeback

Chargebacks are expensive because of the processor fee charged when issued and the time and energy spent on it with an aim to win the dispute.

However, with the right chargeback prevention plan and the best chargeback sites, you can restrict the number of chargebacks and lower the time and effort needed to win disputes.

Firstly, you should know the reasons for issuing a chargeback:

  1. Customer-centric (unsatisfied, confused customer, failure to recognize transactions)
  2. Processing errors (authorization issues, double payments, incomplete transaction)
  3. Fraudulent (unauthorized transactions)

In order to cover these reasons, here are some specific ways:

Pick a known DBA name: The processors print the Doing Business As (DBA) name on the cardholder statement. If it is not recognizable then the customer may not recognize the transaction and initiate a chargeback.

Mention your contact details: Ensure that the phone number is printed on the cardholder statement to make them contact you in case of any query.

Clearly mention the policies: Keep your return and refund policies clear.

Put efforts to resolve issues: If you don’t interact with your customers and work to resolve issues, you will force them to go for a chargeback.

Keep your customers informed of all the updates: Communicate proactively with your customers and keep them updated about their order status. Most customers will never bother you if their orders arrive on time.

Ways to prevent chargebacks:

  1. Make use of Address Verification Service for not-present transactions.
  2. Get an all card present transaction, if not possibly get a complete imprint.
  3. Do not re-try a declined transaction
  4. Do not split a purchase transaction. Cancel the transaction and go for another one for the entire amount.
  5. Clear credit card batches daily

Ways to prevent fraudulent transactions:

  1. Get and compare signatures
  2. Examine the credit card thoroughly
  3. Make sure the number on the credit card machine is the same as on the credit card.

With these tips, you can prevent chargebacks from occurring.

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