Chargebacks are never much fun for any company. They can consume your time and affect your reputation. The reasons behind a chargeback can vary. Whatever the cause, but you need to take clear and prompt action to get it resolved.
A chargeback happens when the original payment into your bank account is reversed. This could be because customers are not happy with the product or don’t recognize the charge in a statement. You may have had contact directly from your customer about the charge in advance, or they may have challenged it with their bank without letting you know. Either way, it is your responsibility as a merchant to get the issue resolved.
Unfortunately, there are no sure-fire ways to preventing chargebacks. Still, you can take precautions that will reduce the numbers received significantly. This all begins with working out the cause of the issue.
Main chargeback causes include:
- The customer wasn’t happy.
- They don’t recognize a charge.
- The cardholder has insufficient funds.
- There was an error in the processing system or the proper authorization procedures were not followed.
Improve Your Systems
If your looking into preventing chargebacks, it’s a good idea to look into the reasons why you are receiving them. Speak to your customer and find out what the problem is. The sooner you get in touch, the more quickly you can get things resolved. Moreover, the more open and transparent you are in remedying any problem, the happier they will be with your overall service.
Make sure your customer knows what name will appear on the transaction. They are more likely to query the payment if there’s another name on the transaction other than your business name. Ensure you have followed all the correct steps and secured the required authorizations. You should keep written proof of these authorizations to present when a problem arises. Most of all, though, you need to respond quickly. If you don’t, the charge will end up being permanently reversed.
All this will help you improve your own systems to make certain they are more robust to prevent mistakes such as these happening too often. Even so, it can help to get the help of an expert. Having people who know the business can avoid the problem early on utilizing a chargeback prevention program and address issues more expertly as and when they arise.