Ten Tips To Avoid A Chargeback – Part #1

Nobody likes dealing with a chargeback.  It probably will cause you to lose money.  You are certainly going to lost time.  You may sully your clean reputation of never having a chargeback before.  You can lose customers over it.  There is nothing pleasant about it.  In our continuing series, we offer 10 easy tips to follow to help you avoid a chargeback:

1. Excellent Customer Service, Can Cut Chargebacks by 18%

Roughly 18% of all chargebacks are product or service related; which can be avoided by providing truly awesome products or services and backing them up with even more stellar customer service and support.

2. Use a Properly Calibrated Front-end Fraud Filter

To avoid fraud/unauthorized chargebacks you need to have front-end transaction screening such as matching the billing address through the AVS system and verifying ID.

Most chargebacks merchants receive are coded as fraud / unauthorized but most of those are ultimately won in the Response process because they are actually Chargeback Fraud or Friendly Fraud. 56% of chargebacks we fight are coded as Fraud / Unauthorized and we win over half of them.

3. Descriptor recognition is KEY.

Tell the customer what will appear on their credit card billing statement at the time of the sale, in an email confirmation after the sale, when the product is shipped out or service is delivered.  We find that customers can be forgetful so reminding them of the descriptor times helps avoid a “friendly chargeback”.

4. Have a Clear Refund Policy.

Offer a clear and reasonable refund option and communicate with the customer to be sure they are satisfied with the purchase or service.

5. Quality is King.

Offer a quality product and/or service! A customer is less likely to initiate a chargeback if they are happy.

6. Make contracts transparent

Ensure contact details are clear and easy to find on your website and all documents (invoice, emails etc.).

7. Basic negotiation…

Work with cardholders who have initiated a dispute to resolve the issue.  Have them call to cancel the chargeback.  It is almost ALWAYS better both from a customer service perspective, and a financial perspective to try to reach a mutually acceptable result with the client, rather than resorting to the chargeback process and allowing the credit card issuer to decide who is right or wrong.

8. Attach Delivery Confirmation to Representment

If you are shipping goods to your clients via carriers, always use trackable delivery method and attach the delivery confirmation signature as proof delivery was made.  If you are providing a service, make sure to get a signature once the job is complete.

9. Limit Ongoing Service Contracts

In case you render services, limit delivery time. The period you are liable to chargebacks counts from the time of delivery, not from the day transaction was made.

10. Confirm Credit Card in eContract

To protect yourself against fraudulently coded chargebacks, list the first 6 and last 4 digits of customer’s credit card number in the electronic contract. The contract validity is confirmed by the client’s electronic signature.