Got Chargebacks? Why a Chargeback can hurt your business. What to do about Chargebacks and Friendly Fraud and how to avoid it.
At some point every business (even the most reputable businesses) will encounter some sort of friendly fraud or chargeback activity from a customer or client that chose to pay by credit card. You may be asking yourself why someone would initiate a chargeback for a good or service that never had any problems. The answer is very simple, banks advertise total security and fraud protection services. This gives any buyer the ability to dispute a settled credit card transaction that was processed through any of the major card networks. Many times clients are truly just confused about where the charge came from and/or maybe a spouse or family member controls the account and does not agree with the purchase and decides to initiate a chargeback with their bank. Businesses that process a high number of recurring payments experience high levels of chargeback activity due to the fact that customers may have changed their minds or forgot they supplied credit card info for a recurring payment or they simply don't have the financial means to keep up with the payment arrangents. As we can see here there are more than one good reason why a person may initiate a chargeback by mistake.
If you are looking for a way to reduce chargeback initiations by your customers you must educate them on your refund policies and why disputing a charge with their bank is never a good means of solving a problem or getting a refund. Instruct your customers to instead contact you first to try and settle the dispute and/or receive a refund. In a retail setting chargebacks are relatively low compared to e-commerce accounts although the problem still remains. Sometimes retailers make the mistake of placing the wrong name on their credit card descriptor. If a customer cannot match the name on their statement to your business they may not recognize it and dispute the transaction. In addition, retailers must always instruct employees to check the ID card of customers using credit card payment.
Bravertek works with industries and merchants who are prone to high levels of chargebacks. We can even get an account approved that has been previously canceled due to chargebacks. Contact us today or click below for a merchant account quote.