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13 Tips To Guard Your Business Against Chargeback

February 20, 2018/ Merchant Stronghold / accept credit card, Chargebacks, Check Processing, High Risk Business, High Risk Business Merchant, High Risk Merchants, Merchant Account, Merchant Services, Online Payment Services, Payment Gateway / 0 comments

For many small businesses that accept credit cards, chargeback is way costlier but there are ways where you can protect your business against those unfair chargebacks. Before going further, let us understand what is a ‘Chargeback’?

Chargeback

Chargeback happens when a customer after purchasing a product, contact to his/her card issuer to dispute the charges. In simple words, when a customer purchases a product and due to some reason disputes a charge with his/her bank, the money is returned to that customer as well as he/she gets to keep the product. But the bank charges the business owner, from whom the product was purchased. This payment, which the business owner gets to pay to the bank, is called the chargeback.

Here are few tips that can help you prevent chargeback and minimize the time and money spent while dealing with it. Being business owner you should understand that disputes could be considered valid due to many reasons. Customer may dispute charges if:

• A hacker using the customer’s identity made the purchase illegally.
• The wrong item was received.
• The product was adulterated
• The customer does not recognize the charge on his credit card statement.
• The customer was billed incorrectly.

Let us now discuss few tips which can help you in preventing a chargeback.

Declined authorization

If the authorization request is declined once, do not go ahead with that particular transaction instead ask customers to opt for different payment method. Also, keep in mind not to request multiple authorizations for a particular transaction.

Authorization code

There will be cases when word “Call” is displayed on your terminal while authorization is being checked. At this point call the credit card company right away. The representative will ask you a few questions and may speak to its customer as well. After that he/she may or may not provide you with an authorization code. If the authorization code is provided, record it else request the customer to try a different card.

System not working

There can be cases where a system is not functioning properly or the card is worn out. At this point, you should key-enter the credit card number, and also remember to make an impression of the card for keeping the record. This is important because a customer’s signature is not enough to protect you from a chargeback.

Gift card

Gift cards are unembossed cards and there is no way to take a manual imprint of it. In case customer wishes to pay by gift card it is advisable to ask the customer for a different payment method.

Signature 

Regardless of the type of the card used for the payment processing, the signature of the cardholder on the receipt is mandatory. This can be used as a proof that the customer made the purchase himself.

Swipe only once

You should swipe the card only once to avoid duplicate transactions, which can lead to a major chargeback. If such situation arises, write “VOID” in bold letters on the customer’s receipt and tear it in front of the cardholder.
Record keeping: To avoid duplicate transaction chargeback, make sure that you deposit only one copy of sales receipt. Be cautious about recording sales; do not record the same transaction more than once.

Clear communication 

Clearer is the refund and returns policy, better will be the communication and it will protect you from chargeback as well. As far as refund policy is concerned, it is better to print it on the receipt directly. If not possible, stamp it near customer’s signature.
Receipt deposit: To avoid chargeback, deposit receipts as soon as possible. Make it a point that all the receipts are deposited within a day or two.
Cancellation request: It is a good practice to honor all customer requests to cancel recurring billing and provide them with a written statement for the same with a date on it. Delay on it can put you at risk for a chargeback.

Unexpected Delay

If, due to any reason, there is a gap between the time payment was made and the time when the product was delivered, it is advisable to inform the customer about the same in written and if possible, also let the customer know the new expected date.
Out of stock: If in case, the product is out of stock or unavailable due to any reason, it is important to intimate the customer about the same and ask them whether they would like to cancel the order or would like to purchase another item instead. Keep in mind that without customer’s permission do not send any substitute product. This will help in reducing chargeback risk.

Shipment 

Never deposit the money you have charged from the customer before product being shipped to the customer. Streamline shipping process in order to get the product out to the customer as quickly as possible. There are chances of a customer getting upset about paying before receiving the product.

Tags High Risk Merchant Accountonline credit card processingOnline Processing