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April 5, 2017

Ten Tips To Avoid A Chargeback – Part #2

chargeback

Nobody likes dealing with a chargeback.  It probably will cause you to lose money.  You are certainly going to lost time.  You may sully your clean reputation of never having a chargeback before.  You can lose customers over it.  There is nothing pleasant about it.  In our continuing series, we offer 10 more easy tips to follow to help you avoid a chargeback:

1. Put Your Phone Number on First Line of Descriptor

Make every attempt at getting your phone number on the first line of your descriptor. While many banks allow for a second line of information, this rarely prints on credit card statements and online systems usually require a “click to expand”.  Just being able to call and speak to you about the charge may clear things up.

2. Leverage 3rd Party Data to Stolen Card Fraud

3rd party services like Feedzai, CyberSource, Kount and NoFraud in conjunction with a fast manual review process will help you prevent the acceptance of stolen payment card information if the card has previously been used for fraudulent purposes.

3. Have a Clear Refund Policy.

For restaurants especially, fraudulent sales often come from employees. When employees know a fraud detection system is in place they are less likely to try to initiate a fraudulent sale. Review every refund made on a daily basis.  Know what refunds are being issued, how many discounts are being issued and by whom.  Look for unusual activity in your point of sale system.

4. Use EMV and the Cloud.

Use an EMV-compliant and cloud-based POS system or reservations system.  The ability to verify payments locally using EMV systems will result in fewer fraud-related chargebacks as the number of lost and stolen credit cards and the prevalence of skimming decline. With cloud-based systems, receipts, confirmations and orders will be stored online instead of on paper, making receipt clutter a thing of the past and look-up of past transactions a breeze.

5. Swipe, Don’t Type

It is always best to physically swipe credit cards rather than manually keying in the number. This is the absolute best way to protect against chargebacks, especially fraud disputes involving incorrect charges. If a problem prevents a card from being swiped, obtain an imprint of the credit card to ensure proof that the card was present.

6. Businesses Using Affiliates Need Specialized Fraud Filters

Affiliate fraud is a unique genre of criminal activity and goes undetected with traditional fraud filters. Anyone using affiliate marketing to generate revenue should add an additional layer of protection. Chargebacks911 created Affiliate Fraud Alerts to help reduce chargebacks.

7. Use an Answering Service with Humans not an Automated Answering

You’ll receive fewer chargebacks if a human answers the phone within 4 rings—24 hours a day, 7 days a week. Merchants who provide human-to-human engagement receive 30% less chargebacks when compared to automated IVRs.

8. Video Demos Reduce Chargebacks & Returns

If you sell a product, consider making a product video in which the product is held, used, and described. We found that when you demonstrate the product in a video the number of returns fell immediately by almost 60%, and the number of chargebacks related to the product ‘not as described’ fell significantly as well.

9. Know Your Reason Chargeback Codes

Your current and historical chargeback reason codes and resolutions are your best insight into preventing more chargebacks.  Each card brand has their own codes.  Chosen Payments lists these codes for each card in previous postings on this blog.

10. Use Technology to Automatically Score & Route Transactions

Leverage the latest tools and back them up with the latest knowledge and practices. Technology solutions such as automated transaction scoring, rules-based filters, transaction/customer profile databases, real-time transaction tracking tools, geolocation filtering and even 3-D Secure are great places to start.

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