Probably every business owner has heard about the chargebacks and is interested in how not to get deceived. For those who don’t know: a chargeback is a procedure for canceling a bank card payment, initiated by the cardholder through their bank. Now lots of frauds tend to use this process for their own purposes, and merchants need to know how to protect themselves. There are some ways of fighting chargebacks like investing in your customer service, using Ethoca alert, dispute chargebacks, etc. This article will tell you everything you need to know about fighting and preventing chargebacks.
How Chargebacks Work
Leading payment systems guarantee their users protection against unauthorized charge-off money from bank cards. If the client declares that the funds from the Visa or MasterCard cards were spent either by a fraudster who had stolen the card or a seller who had not provided the goods/service, the payment system returns money to the issuer’s bank.
After that, the investigation of the incident begins. In the case of confirmation that the client is right, the payment is returned back to their card. If the claim does not receive justifications, then funds are back to the acquiring bank.
Top Reasons for the Chargeback
There are a lot of legit reasons for chargebacks. Here are some of the most common ones:
- The goods were not delivered; the amount is charged off from the card; the seller does not respond;
- The seller refused to accept the goods back;
- The service or product does not correspond to the description or photos;
- The money was written off without the consent of the cardholder;
- Money for goods was charged off twice;
- The seller did not provide complete information or concealed some important drawbacks;
- The merchant charged more than the price stated.
Preventing the Chargebacks
The process of chargeback disputes favors customers most of the time. Credit card companies do not require much proof from consumers since this is a “customer is always right” situation. The best way to fight chargebacks is to be good at preventing them from happening. There are basically two types of chargebacks:
- The fraudster used someone else’s card, and the owner did not know about that. Optionally, the owner paid themselves but insisted that they did not. To secure yourself from such a scam, you can connect the security services, which credit card companies like Visa or MasterCard provide. This way, when paying for a purchase, the cardholder must confirm their identity by introducing an additional security code. This code can be received by email stated during registration / by SMS / by entering the previously obtained permanent code, which only the bank and the cardholder know.
- The misunderstanding between the merchant and a customer might be a reason for the chargeback too. If you hadn’t stated some product or service description clearly, the client might have misunderstood it and thus haven’t been completely satisfied.
Here are some of the ways to prevent chargebacks:
- Place a detailed description of the services and goods provided on your website, attach photos, specify the sizes and other necessary characteristics of the product;
- Organize the technical support of customers and qualitatively answer all of the clients’ questions;
- Keep all the information about the operation and your consumer, including email correspondence, a document on obtaining a product or service, checks, and receipts;
- Refund conditions must be published on the website. Also, in correspondence with the consumer, make sure that they are familiar with the terms of the refund;
- Always keep confirmation of delivery and receiving the product by the consumer;
- Improve your system to combat fraud; introduce modern technologies.
Don’t Give Fraudsters a Chance!
Chargeback frauds have become a real problem nowadays, and it is quite challenging to fight it. A chargeback dispute process is always an option, but it is much easier to prevent it. Make sure you do not accidentally mislead your clients, take care of the customer support you provide, and don’t forget about security and alert services that will keep your business safe.
