What can businesses do to prevent chargeback fraud?
Chargeback fraud is happening more and more often, and while there is no way to fully prevent it, there are measures businesses can take to make fraud more difficult.
Top Measures for Chargeback Fraud Prevention:
Outline Your Return Policy.
Make sure that your business has a clear and concise return policy that is easily accessible to customers. Be as transparent as possible and use precise language to help ensure that there can be no doubts about the process.
Communicate About Recurring Payments.
If you have customers on a subscription or payment plan, notify them in advance of the payment coming out of their accounts. Communication also builds trust, and loyal customers are less likely to commit fraud.
Use Delivery Confirmation.
Delivery confirmation can inform the merchant and/or the customer how, when, and where the delivery of their purchase occurred, and creates a paper trail in the process.
Keep A Paper Trail.
Detailed records of your transactions are essential in the event of fraud. When claims arise, it’s imperative that your business can present documentation of the transactions and the contact information that leaves no doubt of authenticity. Don’t cut corners when it comes to collecting customer information, either: the billing process serves to protect your business from fraud.
Obtain A Card Verification Code.
There’s a reason credit cards have a verification code. The code helps to ensure that the buyer is using a physical card instead of a stolen card number.
Offer Prompt Customer Service.
How easy is it for consumers to communicate with your business? Offer a simple way for customers to access to business representatives or contact information so they can open up a discussion about a refund before going straight to the chargeback route.
Investigating a chargeback can be labor-intensive and even costly, so it’s important to prevent as many as possible. The more information your business has about each transaction, the easier it is to prove legitimate charges. People committing friendly fraud likely don’t even realize they’re doing it, so keeping that documentation can be all your business needs to rectify the situation. In the event of malicious chargeback fraud, your documentation can help to prove that the chargeback claims are illegitimate.
The more you know about chargeback fraud, the better you can prepare for it. It’s an inevitable element of running a business in 2018, but there are methods to help prevent fraud as well as deal with it when it occurs.