Top 6 Ways to Avoid Chargebacks

The term “chargeback” means that a client has disputed a credit card transaction with a particular business, and has requested that the credit card company cancel the transaction. This means that the funds paid by the client (via the card company) will be returned to the credit line, and the business will remain in the negative for the transaction. Chargebacks can be detrimental to a business’s bottom line, on top of costing lots of wasted time during the dispute resolution process. This article will provide useful tips to help business owners prevent future chargebacks before they happen!

Make Sure Your Products/Services Are Understood

Perhaps the most common reason customers seek chargebacks for transactions is that they feel they did not get what they wanted. This misunderstanding arises from a failure on the part of the business to clearly define what is being offered. To prevent this type of dissatisfaction, ads and webpage descriptions must thoroughly describe what the customer will receive. This way the customer can make an informed decision about whether they really want the product, which will save the business owner many headaches later on.

Have a Clear Delivery Policy

Many chargebacks are also done when customers claim goods were not delivered. Make sure you are offering a clear delivery plan and time frame, and ensuring that the customers enter their correct address. Having verifiable address information beforehand will give businesses the proof they need to dispute chargebacks by showing the delivery was performed correctly.

Wait Before Charging

Businesses might also wait until the delivery occurs before actually charging a customer’s card. This allows the customer to have an appropriate time to inspect the items and dispute a mistaken delivery directly with the company. Once it appears the order is satisfactory, the seller can feel confident in charging the card. Of course, the potential downside of this strategy is if the card is overdrawn once delivery happens, the charge may not go through – so don’t use this method unless you’re very confident in the customer’s trustworthiness.

Ensure that Orders are Correct

Incorrect orders generate chargebacks. Sometimes, businesses mistakenly send incorrect items or quantities. Businesses need to implement standard procedures to maintain the accuracy of their shipping process. Businesses also need to accurately record the exact items that go out in a shipping box to have proof that the order was filled as desired.

Communicate All Return and Exchange Policies

Customers will not do chargebacks if they are aware of the company’s own internal exchange and return polices. Make sure customers know they can talk to you first by placing such policies in a conspicuous area where customers will see it.

Be Available

Some chargebacks occur because customers cannot locate you or your employees to resolve an issue. Thus, they fall back on the credit card’s protections to make sure they are not unjustly charged. If your staff is consistently available to service clients with returns or exchanges, they will not need to call their card company.