Chargebacks can strike fear into the hearts of merchants. Chargebacks are costly to the merchant in terms of time and reputation. Thus, they’re something merchants want to avoid at all costs.
A chargeback isn’t simply a return from a customer. A return is when a customer comes into the store to return something. A chargeback is when a customer sees a charge on their bank statement and doesn’t think that it belongs there. They then call their bank and have them reverse the charge. Their bank then charges the merchant’s bank, which in turn charges the merchant. It’s a long process that’s costly to the merchant and also damages their reputation.
Too many chargebacks can spell bad news for a business. Here are some ways to make costly chargebacks a thing of the past.
1. Have an Easy Refund Policy
Having an easy refund policy is one way for you to avoid costly chargebacks. Sometimes, customers claim chargebacks simply because they don’t know how to refund a product to a company, especially if it’s an online-only company.
Make it incredibly easy for a customer to refund a purchase if they need to. Also, make it easy for them to find the refund information. It should be on your website and on their receipt. There shouldn’t be any confusion about how to do it.
2. Billing Descriptor
A billing descriptor is what your company is called on your customer’s bank statement. If your descriptor doesn’t make sense to them or doesn’t seem associated to your company in any way, a customer is more likely to think that it’s a fraudulent charge, even if it isn’t.
Have a billing descriptor that is obviously associated with your company and tells your customer what who they bought from. When they see it on their bank statement, they won’t be puzzled or worried.
3. Describe Policies Clearly
Chargebacks were created as a way to protect the consumer; unfortunately, this means that it’s up to the merchant to prove their innocence rather than the customer to prove their guilt. In light of this, ensure that a customer is aware of all of your policies.
4. Keep Paperwork
One of the top rules in business is to always keep paperwork up to date and filed properly. Keep all of the receipts, invoices, and communication regarding orders with customers in a safe place. That paperwork serves as part of your protection from costly chargebacks because you have all of the evidence at your fingertips.
5. Always Check Card Details
When you accept credit cards as a form of payment one of your responsibilities is to ensure the card details match the person who’s using the card and that the card is good to use.
Also, if you need a customer to sign a receipt, always make sure the signature matches the one on the back of the card. These are two easy things you can do to save you a headache further down the line.
If your company has experienced costly chargebacks or you’re worried you will, put into practice these five ways to make them a thing of the past.