Payment processing

5 Ways to Protect Your Business from Costly Chargebacks

The benefits of accepting credit and debit card transactions for your business are endless—you can increase productivity and efficiency, grow your business, provide customers with the easiest payment options, and much more. Yet, accepting cards for business transactions can also have its downfalls.

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Chargeback fees can pose a costly nuisance to your business. Chargebacks protect customers from various credit card transactions that may have been fraudulent or misleading purchases. Customers can file a complaint with their issuing bank and, if found true, the merchant is liable. If you find yourself faced with a chargeback fee, the cost may be upwards of $100.

As a merchant you want to avoid chargeback fees at all costs. Here are the top five ways you can protect your business from being penalized. 

1. Be an Honest Seller

When you’re honest with your customers, there’s less room for misinformed purchasing mistakes. Honesty is always the best policy.

Include accurate descriptions of your products, and do not over or under represent the products you are selling. In addition, ensure that the price you quote your customer is the price that they are actually charged—avoid all hidden fees and be upfront and honest with your paying customers. Not only will this help prevent chargeback fees, but it will help you maintain brand loyalty with your customers.

2. Sell Only High-Quality Items

Nothing is worse than ordering a great item online, only to find that when it arrives it’s nothing like you expected. Not receiving a quality item that you paid for is cause for a chargeback complaint.

Again, it is important to provide your customers with accurate product descriptions so that there are no surprises when they receive their purchase.

The best way to avoid even the possibility of someone filling a complaint about your product is to make sure you’re only selling high-quality items. This way, there will be less room for upset, compared to other merchants who sell low-quality items.

3. Provide Exceptional Customer Service

When it comes to chargeback fees, exceptional customer service can be your saving grace—it can make or break your company. With easy options for customers to exchange or refund a purchase, there will be less of a chance of someone filing a complaint.

Providing easily accessible (meaning no one-hour wait times to speak to a representative), friendly and helpful customer service agents for your upset customers to speak with can help calm the situation so that it does not escalate to a complaint. Your customer service agents need to carefully listen to the needs of your customers and provide them with suitable alternatives for fixing the problem.

When your customer service representatives can fix a bad situation, you’ll be able to mend customer perceptions of your brand and mitigate chargeback fees.

4. Prevent Fraudulent Transactions 

Preventing fraudulent transactions may be easier said than done. There are many signs of a fraudulent transaction, and it’s important that you stay informed to protect yourself.

While a fraudulent transaction isn’t your fault, your business is still liable for the chargeback fee. Staying informed on what constitutes a fraudulent transaction is the best way to protect your business from permitting any suspicious purchases in the future.

To protect yourself from fraudulent transactions, consider using a provider that offers chargeback protection for your business accounts.

5. Avoid Unauthorized Use of Cards 

Much like fraudulent transactions, you may not know if a card is being used without authorization. Stay on the lookout for red flags which could include the misspelling of the customer’s name, mismatched information, and different billing and shipping addresses.

To prevent an unauthorized use of cards, you should get as much information from your purchaser as possible, including their name, address, card number, expiry date and card security code.


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Matt Moore

As the President and Co-Founder of BNA Smart Payment Systems, Matt is responsible for the company’s strategic direction, daily operations, and growth. Entrepreneurial by nature, he brings a wealth of sales and marketing experience earned from over 36 years in business. He has developed, implemented, and directed international sales and marketing strategies, established strategic alliances with international companies, and demonstrated leadership in the electronic payments market. Prior to BNA, Matthew served at the senior levels of major EFT/POS companies, helping them increase sales and optimize customer service. Matt is also a father of three, a fitness enthusiast who does power lifting and CrossFit, and he enjoys weekends at the cottage.

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