One term that every business owner should get immediately familiar with is Chargebacks. Chargebacks are simply a request for a refund made by a customer of the business in question.
If a customer is not satisfied with the product or the service offered to them, or they deny having made any payment, they can raise a request for charge reversal from their banking partner.
This is, in essence, what chargeback is, and it can be pretty harmful to a business. Not only would the business have to refund the complete transaction, but they have to pay a chargeback penalty to their financial partner.
This could be disastrous for small businesses with small profit margins, especially if they are at the end of chargeback fraud. So, it makes sense for them to fight chargebacks, and here are some ways a business can do just that.
By Carefully Choosing The Online Payment Processor
Naturally, a business needs to be extremely careful when they choose an online payment processor. No one can deny the fact that any business would want to partner up with a reliable payment processor. But they must also ensure that online payment processor has an excellent record against chargeback thefts.
Chargeback theft is among the many scams that are run by fraudulent actors. It is crucial that the payment processor has the latest anti-scam and anti-phishing software in place.
If the online payment processor is not up to date with security, the business that relies on its online payment processor likely has to suffer the consequences sooner or later.
Choosing An Appropriate Transaction Descriptor
Handling chargebacks is a complex situation, requiring one to be at the top of things. One of the most common reasons why customers would request chargebacks is because them not being able to decipher the transaction charge on their card.
Yes, that is right. It is not because the customer is unsatisfied with the service or the product, but when they go through their monthly statement, they do not recognize that particular transaction made by them.
This simple issue can be easily sorted out by businesses opting for an appropriate transaction descriptor or effective chargeback management software. A business should also register itself with the payment processor under its trade name to lessen the chances of such chargeback claims.
Creating A Strong Connection With The Clients
It might seem like such an obvious idea, but it can work wonders when it comes to preventing chargebacks. Naturally, a brand should look to build a strong connection with their customers anyway as it would only help them retain customers, but there is another benefit to it as well.
If there is a strong connection with the brand and its followers, then it is very likely that the customer would directly connect with the business in question for their grievances.
What this does is remove the payment processor from the equation. A settlement would be reached between the parties without the customer needing to request a chargeback.
Lax Business Processes
For genuine chargeback cases, there are often only two reasons behind it, either the product or service is suboptimal, or it took too long for the business to deliver the product to the customer. The eCommerce market is highly competitive.
Why would a customer wait longer than necessary for a delivery when other avenues are open to them that guarantees timely delivery? The late delivery or the suboptimal product would encourage the customer to ask for a chargeback.
The only solution to this is for businesses to improve their business processes and make the customers their number one priority.
Having a customer support helpline in place would also prove to be helpful. Customers can directly connect with the support executive to get immediate information on their order. Also, if there is an issue with the order, the customer support executive can rectify it immediately.
Have An Easy-To-Understand Refund And Shipping Policy In Place
Adding to the previous point, it would be helpful if businesses had a comprehensible refund or replacement policy listed on the site. It is crucial for businesses to be as clear as possible with their policy stating the window of time for a refund, restocking fees, and also exclusions.
It would also help to have a defined shipping policy in place. So, these are ways through which you can easily defend your business against chargebacks and ensure constant growth for your business.
