Ten Useful Things Relating To Chargebacks
- The Chargeback Reason Code Encyclopedia
Understand Visa, MasterCard, American Express and Discover chargeback reason codes, get insights, examples and benchmarks for each.
- Google, the Obvious Secret Weapon
There are lots of fancy tools to research the location, email address, physical address, and other customer information when fighting a chargeback. But sometimes the most effective (and free) one is Google.
- Read the Rulebook… Closely
The operating rules and regulations (see e.g. Visa, MasterCard, AmEx, and Discover) for each network contain valuable information regarding the dispute process, roles, responsibilities and specific procedures that should be taken when responding to a chargeback.
- SurveyMonkey (for Service Businesses)
If you offer a service and are in a high chargeback industry like Tech Support, or Credit Repair, using an eContract will help you win ‘I didn’t make that charge‘ chargebacks, but most of yours will be ‘The Service Was Bad‘ type chargebacks. If you incorporate a customer satisfaction survey system, like SurveyMonkey, immediately after the service for all of your businesses, you’ll be able to overcome all of those chargebacks.
That is, either the customer is satisfied with the purchase, and states so on the SurveyMonkey customer satisfaction email (which tracks their IP), or they’re not, at which point you should just void the charge.
If a customer tries to dispute a charge after giving you 5 stars and saying they were satisfied, they’re not going to win that chargeback dispute very often.
- A little reading material for your education…
Check out the Chargeback.com eBooks and Whitepapers.
- The Goal Isn’t Zero Chargebacks
Your industry has a benchmark chargeback ratio, get to know it and get comfortable with it because the only way to avoid chargebacks altogether is to stop accepting cards.
Chargebacks are a powerful lagging indicator of business operations; eliminating them completely would actually prove to be a grave warning of poor performance and profitability.
- Know the Full Costs
For each dollar lost to fraud, online businesses will ultimately lose $2.40 in revenue due to associated chargeback fees, lost merchandise, and sales potential.
- Monitor Sale Frequency Closely
Keep an eye on your daily batches (for small merchants) and hourly (for big ones) for any significant fluctuations. Scammers get greedy, so if a fraudster figures out how to break through your defenses, they’ll usually hit you a bunch of times. But if you catch them early enough, you can void them.
- Offer ACH to Reduce Payment Declines
If you’re serious about preventing ecommerce fraud and chargebacks, then you’re going to put enough restrictions on your checkout page that you can expect 15-20% of all credit card transactions to be declined. Unfortunately, you’re going to lose a lot of legit customers that way too. So by offering ACH (check payments) as an alternative form of payment, you can recoup many of the legit customers who accidentally get filtered out by your credit card processing fraud filters.
- Integrate Caller ID and Online Ordering to Speed Up Transactions.
When taking online and telephone orders, always identify the credit card correctly on POS systems and terminals. With caller ID ordering and online ordering integrated in the point of sale, the system will remember the customer’s card number every time.
Merchant Business Tips