Even if you manage to keep your chargebacks below the 1/2 – 1% threshold, any chargeback claims – whether remedied or not – take up precious time researching what happened. I’m sure there are other ways you’d rather spend your time (like focusing on new sales).
The best way to deal with any chargeback is to prevent them from happening in the first place.
Tips for preventing chargeback claims:
Use a clear DBA (Doing Business As) name that customers will recognize on their billing statements. An unrecognized DBA on a billing statement is one of the most common causes of chargebacks.
Put your phone number on your customers’ statements. If they don’t recognize your business name or have a question about the charge, they are more likely to call you to resolve the matter than calling their bank to file a dispute.
Respond to chargebacks as quickly as possible. A limited amount of time is available to resolve a chargeback. If you miss the window of opportunity to respond, you forfeit your rights through the chargeback process.
Never accept an expired credit card.
Obtain authorization for the full amount of the sale. You should never accept declined transactions or split them into smaller amounts.
Be suspicious of high-ticket sales requested to be sent next-day air or if a runner will be in to pick up the purchase at a later time.
Use the fraud services offered by the processing bank including AVS (Address Verification) and CVV2.
Work closely with customers to resolve matters regarding merchandise quality and service issues.
Balance each batch to the host or to your order tickets to help prevent duplicate charges.
Call the customer about suspicious orders to ensure the order is legitimate. If you can’t reach the customer, you may have intentionally been given incorrect contact information.
Verify the customer’s name, address and phone number with the card-issuing bank. By calling the Voice Authorization Center for address verification, you can verify the address and also provide proof that you verified the address.
Look closely at orders with different shipping and billing addresses. Oftentimes customers have orders shipped to their work or to gift recipients, however it’s not a bad idea to contact the customer to make sure the order is not fraudulent. Be especially wary of orders with domestic billing addresses and foreign shipping addresses; they are usually fraudulent.
Always get signed proof of delivery. Provide a shipment tracker log that shows that the customer received the order.
Charge the customers’ account when their order is shipped. If you know there will be a delay in delivery, wait to process the credit card, or only charge the card as you fulfill the order.
Clearly state your return/refund policy on your website. Make it a requirement that customers read the policy before their order is processed.
Provide accurate descriptions and images of your products and services.
Be cautious of foreign orders.
Customer Service is Paramount
Unfortunately, online merchants are at a disadvantage when it comes to chargebacks. Without a credit card to swipe or a signed receipt, verification of a sale is always risky business.
But that doesn’t mean you have to leave it to chance. New tools and software programs help to reduce fraud and consumer disputes.
Verified by Visa and SecureCode are great tools that will help you to verify a customer’s identity at the time the transaction takes place. In addition to taking advantage of current technology, customer service is the tried-and-true way of keeping customer complaints under control. When you have a good relationship with your customers, and they don’t just feel like a number, they’re more likely to call you than rush into initiating a chargeback. Enforce a customer-centric client satisfaction policy, and do whatever you can to provide your customers with a positive shopping experience. Most importantly, always remember to perform your due diligence.