Chargebacks are experienced in incidences of either miscommunication between a customer and the seller or even due to fraud. Credit card chargebacks involve the process of reversing funds due to emergence of a dispute claimed by the credit card holder after purchasing an online product. Business owners end up counting losses since the initial payment is defaulted in spite of the sale of the particular good or service having taken place.
Consequently, credit card chargebacks can affect the ability of the business to maintain a merchant account. This again negatively affects the acceptance of future payments using credit cards for the merchant’s business.
Merchant account providers may even impose fines to businesses with high credit card chargeback rates. The provider may at some incidences forcefully put funds on a hold. Therefore, the seller or business owner may use the following ways to reduce credit card chargeback,
Simplify Cancellation and Returns
This way appears to serve as a counter method by the seller. The method simply involves providing a straightforward cancellation and return policy. It encourages undergoing the cost of the returns rather than facing the chargeback cost, which appears to be higher. The factors and steps to consider when coming up with the cancellation policy to minimize losses include,
· Possessing an easy-to-follow policy and guidelines- Involves a brief and clear policy to guide the process and identify the products to be returned.
· Train your Customer Service to be polite and practice the process with professionalism.
· Ensure you make a visible display of your business return and cancellation policy on the shipped invoice and even the company’s website.
Streamline Shipping Operations
While shipping products to an online buyer, ensure that the shipping process is fast, smooth and efficient. Purchases from most network and multilevel marketers are largely impulse-driven and triggered by their captivating adverts.
Thus, decreased shipping time by the sellers will again decrease the time that an online buyer thinks about the product already purchased.
Consequently, the online buyer will have minimal time to consider changing their minds. Hence, a product taking weeks to be delivered with unnecessary delays will experience more chargebacks. This emphasis on the direct marketers to ensure streamlined shipping operations.
Emphasize Customer Service
With the increasing competitive nature of online businesses, the shopping platforms have rapidly increased. Thus, it is up to the merchant to try to distinguish his business from the others. This can be enhanced by creating an efficient online support team.
The support teamwork is to guide the new buyers on how to go about their shopping and payment process with minimal or even no errors. Thus, a reliable customer service will ensure they reduce chargebacks and guarantee boosting sales in the business.
Use Fraud Prevention Tools
In some instances, credit card chargebacks typically results from fraud. The criminals impose themselves as buyers and fraudulently obtain credit information to purchase a product. However, the merchants in association with their payment processors have come up with various tools to prevent such fraud. Some of the tools include,
Anti-fraud databases- The database alert the sellers of malicious issues like credit card numbers previously associated with fraud, rapid number of orders with multiple credit card numbers and suspicious activities of fake orders triggered by botnets, among others.
Card Security Codes-Merchants can verify that their customer is the one in possession of the credit card at the time of purchase.
Thus, it is quite evident that it would be very hard for merchants to avoid facing credit card chargebacks. However, the above ways can guarantee long-term results of lower charge backs and higher revenues.