Chargebacks are an inseparable part of running an e-shop and accepting online payments. However, there are certain steps you can take to minimise the risk of getting them, so take a look at the following list and protect your business from potential loss.
- Remember that clear information can save you a lot of money and trouble.
- Make sure that you provide your customers with all the possible contact information.
- Your contact details such as a physical address and a telephone number should be clearly visible on your website.
- Provide accurate descriptions and images of your products.
- Use a clear DBA (Doing Business As) name that customers will recognize.
- Put your phone number on your customers’ statements. If they do not recognize your DBA, they can call you to find out who you are and why you have charged them.
- Be clear with your return policy, as well as your shipping policies. Make sure that customers read the policies before their order can be processed.
Chargebacks and retrieval requests are inevitable part of doing online business. Many businesses need to handle chargebacks and retrievals on a daily basis, while for some others a chargeback or retrieval request is a rare thing. Yet in both cases it is good to know what the difference between the chargeback and retrieval request is. This knowledge will enable you to react quickly and take the appropriate measures to resolve these situations in a timely and efficient manner when they occur.
A retrieval request, also known at some banks as “soft” chargeback, takes place when the credit card issuer contacts the merchant to obtain information about a transaction charged to one of its cardholders. The reasons for retrievals can be various: it may be a result of a customer question or dispute, inaccurate or incomplete transaction information, a processing error or an indication of potential fraud. The bank will request a legible copy of the transaction authorization proof.
The Address Verification System (or simply AVS) is a method for merchants to verify the identity of a customer who uses a credit card.
AVS is an excellent way to reduce the risk of fraud and increase the payment gateway’s security. In other words, it checks that a customer is the cardholder he claims to be and finally – it decreases the number of chargebacks.
I’ve just found an interesting web-based application – BillGuard. It scans your credit cards daily, alerting you to hidden fees, billing errors, misleading subscriptions, scams and fraud.
Sounds interesting, doesn’t it?
Chargeback – the return of funds to a consumer. It’s his protection guarantee and last line of defence. Chargebacks occur mostly due to fraudulent activity or consumer disputes.
A chargeback is usually requested by the cardholder and initiated by the card issuer. Most common reasons are that a consumer doesn’t recognize a specific transaction or isn’t satisfied with the purchased service/product and wants his money back.
Merchants usually prefer refunds, which are the same from the customer’s point of view (he gets his money back), but a lot better for the ebusiness owners. Merchants have to pay a relatively big fine for every chargeback; furthermore, lots of chargebacks make a merchant a risky one for acquirers, which can lead even to the end of their cooperation.
Of course if a chargeback request is unfounded, the merchant can prove this (he has a time limit to respond to a chargeback request) and convince the acquirer that there’s no reason to reverse the transaction.
Bottom line, being a cardholder you have the full right to request a chargeback whenever you think you deserve your money back. However, asking for a refund will make you more friendly towards the merchant and there’s a good chance you’ll get your money back (that is if you have a good reason).
And being a merchant… Simply be aware of this mechanism and provide good quality service or/and products.
A chargeback means returning funds to a customer. It’s forced by the issuing bank and causes merchants a lot of problems, wasting their time and money. So obviously nobody likes a chargeback. Most merchants will do a lot, to avoid them. Even if their policy doesn’t allow refunds, they’ll probably give one to a client just to make him cancel the chargeback request.
So how to avoid chargebacks?
I won’t delude you that there is one efficient method. Sorry, chargebacks are troublemakers for all merchants and it’s going to stay that way – at least for some time. But it doesn’t mean, that you can’t do anything to avoid them.
If you get a chargeback request, than you usually have some time to prove your innocence. This means convincing the bank, that the client’s request is unjustified.
But that’s fighting the symptoms. It’s just saving your hide, not avoiding the danger. Let’s focus on the causes.