Chargebacks can cause a great deal of trouble for a business, especially when merchant accounts initiate fees for them. Credit card processing has a wealth of benefits, but it also has complications such as consumer chargebacks. Consumers initiate chargebacks for a wide variety of reasons including fraud, attempted theft, honest mistakes and discontent. Every business deals with chargebacks on some level, but a whole lot of chargebacks can be the death of a company. The following are some tips on how to avoid a whole lot of chargebacks in business:
Always Represent the Products Accurately
One of the biggest reasons for consumer chargebacks is product misrepresentation and false advertising. Credit card processing allows consumers to obtain products quickly. Many consumers are excited about such products. A person who receives a product that does not match its description will process a chargeback. This person may call the credit card company and reverse the charge. The result will reflect the business owner’s merchant account negatively, and it will cost extra money. Additionally, the merchant may lose the product. For these reasons, it is best for online merchants to describe their products precisely at all times.
Create and Maintain a Fair Refund Policy
Every business should have a fair refund policy for its customers. Printing a copy of it and placing it on the counters is a smart practice. Online merchants should have their refund policy stated on their websites. Posting the refund policy will cut down on chargebacks because the merchant will have proof that that the customers knew the policy. Another way that a business owner can avoid many chargebacks is by resolving complaints immediately. A reliable business owner will apologize for the consumer’s displeasure and try to compromise on a resolution.
Use Secure Checkout Practices
The best way to avoid chargebacks that originate from fraud is to ask every credit card customer for identification. The name on the identification should match the name on the credit card. The credit card should be signed on the back, and the person’s identification should be current. Additionally, the cashier should obtain a signature from the customer that proves his or her authorization of the transaction. Online businesses should use encrypted sites and software that requests credit card expiration dates and security codes to ensure that the customers have physical possession of their cards.
Remaining honest and forthcoming is the best way to avoid many chargebacks. Businesses should strive to provide high-quality products, as well.