With your merchant account in place, the online payments flow in and business booms, but with this new way of collecting money comes a new problem: chargebacks. They happen when a customer challenges a charge and the bank returns their money. You are left trying to prove the validity of the transaction in order to reclaim your money.
Chargebacks are more than a nuisance; they cost you money in fees and lost revenue. This is a situation where an ounce of prevention is better than a pound of cure.
Here are some tips to help PREVENT chargebacks from happening.
- Make your name recognizable. One of the biggest causes of chargebacks is when customers don’t recognize the business name on their charge. Make the name people see on the charge clearly connected to your product or service.
- Be easy to contact. Most customers will look for a phone number or email to check on a charge they don’t recognize or want to dispute. Be sure to have a phone number or email and monitor them carefully. The mistakes and misunderstandings which cause chargebacks can often be avoided with a bit of contact. This also maintains goodwill while it saves money.
- Detail the sale Be sure to explain exactly what the customer is getting in the product or service. Many chargebacks occur because the description of the offer was vague or incomplete. Pictures of product, list of pieces included, details of service provided all avoid the misunderstandings that lead to chargebacks
- Refunds Your unhappy customer is going to cost you money. The chargeback system is weighted to favor the customer so you are more likely to lose than win. In a dispute you lose the money, incur transaction fees, damage your reputation, and have a customer who may spread their dissatisfaction through online channels. A prompt, cheerful refund can avoid charges, and create a positive customer experience.
- Say Free if you mean FREE If you ask customers to enter credit card information for a limited time free offer and then roll them into the paid system without further communication, you are inviting chargebacks. As people see the charge for the offer they forgot to cancel they are likely to object. Not only do you not add a client, you incur the cost and ill will of a chargeback.
- Don’t promise what you can’t guarantee People will hold you to the promises you make. If you promise a 20 pound weight loss, be prepared for chargebacks from the people who didn’t lose 20 pounds. Your offers are terms to which you can be held so promise only what you truly can guarantee.
Enjoy the benefits of online payments, and be sure to monitor customer reaction to maintain your business reputation, establish positive customer relationships, and minimize business costs. Working with a process transaction company such as AVP Solutions can offer you many ways to make the most of your online business services.