By Nodus 21 June 2018
Accepting payments from customers can be a hassle for merchants. Once the payments are finally processed, the last thing a merchant wants is to find out that their bank has issued chargebacks for amounts that have already been collected.
What is a Chargeback?
A chargeback is when an issuing bank forcibly returns funds to a consumer, reversing a prior transfer. Chargebacks can be troublesome to merchants if they occur frequently, and they can also accrue additional fees from the processor. Chargeback fees on average range between $20 and $50, but if the merchant is labeled as “high risk” from the bank, they can accrue even higher fees.
Reasons for Chargebacks
The majority of chargebacks will be initiated because the customer…
- Never received the item
- Is dissatisfied with the product/service
- Did not receive their refund for a requested return
- Did not authorize the transaction or did not recognize the transaction
How to Avoid Chargbacks
There are certain characteristics that foster more transaction disputes. Here are 5 tips on how to improve your current processes so you can prevent future chargebacks.
- Be transparent in your offerings
Take time to accurately describe and display the items or services that you are selling in order to avoid disappointed consumers, especially if customers are self-ordering through a webstore. If the consumer has a clear understanding of what they are purchasing, they will be less likely to return and therefore less likely to dispute charges.
- Make it easy for customers to contact you
Clearly provide your contact information on your website and confirmation receipts. If customers have an issue with an order, you want it to be easy for them to reach out to you instead of going directly to their credit card company.
- Provide delivery details
Provide customers with reasonable delivery dates and tracking numbers. If customers get concerned about the delivery of their package, they may feel the need to dispute the charge.
- Deal with customer issues quickly
Fight chargebacks with good customer service. If a customer is unhappy or expresses concern about a charge, take care of it as soon as possible. The longer they have to wait, the more likely they are to bypass you and go directly to the credit card company.
- Make it easy to recognize your company
A payment descriptor is how your company name appears on the consumer’s credit card statement. Make sure that the payment descriptor matches the company name that your customer would recognize from your website, order form, etc. If a consumer sees an unknown company on their credit card statement, they may think it is a mistake. If you are a current Merchant Services customer of Nodus, our team can help you update your payment descriptor.