If you run a digital business, you must’ve already dealt with frequent and unfair chargebacks coming from the banks. We’ve prepared a short guide on how to set your biz free from them.
How It Works
Chargebacks are set by a credit card issuer: American, Express, PayPal, Discover, and others. They happen because at some point, some of your clients may be displeased with the extra charges they receive.
They start disputes and regularly banks take the clients’ side. As a result, you won’t be just debited with a card charge, but also will have to pay an additional fee. This is why your business needs chargeback protection.
Sometimes, a chargeback is more than legit though. Here are a few instances:
- Failed order. If your customer never got the goods/services from you.
- Quality issues. If the product is of bad quality, defunct or simply doesn’t do what it was promised to.
- Wrong billing. Due to a technical mishap, a client can be billed twice or pay a higher cost.
- Suspicion. If a customer fails to recognize the bill and can’t remember that they bought anything from you at all.
But improper chargebacks aren’t rare either. Although, e-commerce looks for new effective mechanisms and regulations to stifle this problem, dealing with depletive chargebacks is your responsibility. So, how do you do that?
Get Back, Chargeback!
Chargebacks require close attention all the time. Ideally, if you run a small- or middle-sized business, you must review the chargebacks every 6-12 months. And here are a few methods to protest them:
- No mix-up. Always use the same payment descriptor. Basically, it’s your business name that your client will see on the bill/credit card statement.
- Protocol. Your credit processor has a number of rules to follow before you can authorize a non-present purchase. They help prevent fraud like a claim that your product was never delivered.
- Make a contract. Nothing beats the good old legal papers. Get your client to sign a contract, which states what, for how much, and when you’ll do for them.
- Stay alert. Always double-check if your prevention system spots suspicious signs: billing/shipping details that don’t match, a single client with different aliases, etc.
- Client support. Act fast and contact the displeased client if they begin a chargeback dispute. There’s a good chance you can settle it without extra expenses.
- Keep track. Carefully record all transactions that take place. Dates, time, client’s name, authorization steps, receipts, name/price of the product, and so on. It helps to filter out chargebacks from fraudsters or those who are honest, but forgetful.
And never shy away from protesting an unfair chargeback — if you feel that you can win, always go for it. Outsourcing it to third-party experts could also help.
No Partying at Your Expense
At the moment, these are the surest methods to fend off a swarm of improper chargebacks. And while you never should refuse it if your client’s right, contesting them will increase your revenue in the long run.
