Ten Tips For Dealing with Chargebacks
Chargebacks are best managed in a systematic way, rather than acting on emotion when you receive one. Incorporating chargeback best practices into your business is vital. Our experts offer useful best practices to deploy when responding to a chargeback notice.
From developing rules about a methodology on preparing documentation to creating a customer feedback loop for products and services, these best practices are all about systematizing and streamlining your company’s approach to chargebacks.
1. Manually Issued Chargeback Disputes are More Effective
Disputes should not be submitted until they’ve gone through a human review process. Cases generated through automation can include errors or omit essential information. This can damage the merchant’s reputation with the issuing bank.
2. Fight All Friendly Fraud
We find in better than 60% of friendly fraud cases the customer never even contacts the merchant to dispute a charge. This is usually purposeful fraud by the customer. Customers somehow feel this fraud is not quite the same as stealing from the merchant—but it is.
3. Get, and Stay, In Front of the Customer
Create clear, consistent methods for contacting the company, including your billing descriptor that appears on the customer’s monthly credit card statement.
4. Don’t Fight Losers, Fix the Losers
Only fight chargebacks where you can gather sufficient compelling evidence. If you find that you can’t provide compelling evidence, work on fixing that problem for the future.
5. Throw the Kitchen Sink At ‘Em
Always respond to chargebacks with compelling evidence in your favor. You can even include things you might think are irrelevant. If it relates to the transaction, include it.
6. You Won’t Win Them All.. But That Doesn’t Mean You Shouldn’t Fight
The chargeback ecosystem will always consist of a portion of legitimate chargebacks that you can’t recover. But with comprehensive management of the chargeback process, you can recover the revenue lost from chargeback fraud and friendly fraud.
7. Leverage customer reviews.
They can help you prevent chargebacks. Reviews are another key indicator of how your products and processes are experienced. Addressing a complaint or negative review by tweaking and improving your offer can prevent chargebacks.
8. Have a Structured ‘System’ for Fighting CBs.
Set yourself up for success with a structured data collection and response process that enables you to act quickly and comprehensively. This will enable you to minimize the time you are “out” the revenue lost to a chargeback.
9. Read the Latest ‘High Risk’ Blogs
Reading low risk merchant services blogs is a waste of time for high risk merchants. And most of the high risk blogs are just super-thinly disguised marketing pieces. But there are a few good blogs out there that you should bookmark: UniBul, The ‘High Risk’ blog, the Chargeback Gurus Blog, mostly low risk but still worth reading: CardFellow Blog.
10. Free Downloadable eContract Templates
If you’re going to have your customers sign eContracts (which you should because it will dramatically improve your chargeback win ratio) make sure they’re actually effective at helping you win chargebacks. There are many out there on the internet.
Merchant Business Tips