As the last weeks of the holiday season pass and the receipts total up to a good, or even great year, you take a sigh of relief and settle in for the quiet of the post holiday slow time. Then suddenly you find the grinch who stole Christmas was just a dressed-up chargeback. A chargeback occurs when a customer says they want their money back – the item was never delivered; it was damaged, the wrong size, color or one of a seemingly endless list. The bottom line is that the money is now flowing the other way, and you may be out the merchandise, the money and the shipping cost. During this time chargeback rates may jump 30% to 50%. You may well be hit with a flood of reality as well as phony chargeback claims in a short period of time. Since unhappy customers lose faith in their ecommerce systems, processors err on the side of the customers, and the burden of minimizing the claims falls on you, the vendor. Prepare to invest time and energy to these issues since your window of time to respond to claims is usually quite short.

Contact the customer. Getting the purchaser to drop the chargeback is a home run and the best solution. Many times, the claim will be that the purchaser doesn’t recognize your vendor name, or forgot the purchase. A friendly call or email can accomplish both closure on the chargeback and good will for you as a vendor. Even if you are not able to avoid the chargeback you may retain the customer’s goodwill.

Prioritize your chargebacks. If you’re hit with a load of claims at one time, organize them to make the best of the short time frame you must respond. Maybe you sort them by the strength of your proof – signed receipts, shipper receipts, and signed orders. Or you may sort them by the level of financial impact they have – put the major chargebacks ahead of the low cost ones. Your goal should be to respond to every chargeback since they all cost you in fees from the processor, lost revenue, financial reputation and impaired goodwill with your customers.

Respond to your processor. In baseball we say, “the tie goes to the runner.” In chargebacks the tie goes to the consumer. Keeping faith in the system means that processors value satisfied customers, and you are the one paying the charge and suffering the damage to your financial reputation. Processing companies are flooded with challenges at this time of year, so make their work easier by providing clear statements of the issue, readable documentation, and observing the time lines they establish for your response.

Know when to accept a chargeback – There are some chargebacks that should not be disputed. First, if you don’t have the documentation that you need to prove your case. Can’t win! Don’t fight! Secondly, if the cost of contesting the chargeback is more than the cost of accepting it. Third, where the cost of the item is low and the customer goodwill is at risk. Each transaction should have a quick review for these points.

Plan for next year – While it might be too late for this year, it’s not too early to think ahead and learn from this years’ experience. Keep track of this the issues that arose this year. What were the most common complaints: a shipper, a small group of individuals, your vendor description, item names and so on. Make a list of steps you can take to prevent chargebacks and put them in place to help you all year and prepare for the next holiday onslaught.