Credit card processing provides a valuable benefit for merchants and consumers. In fact, thriving businesses can generate a tidy amount of monthly sales via electronic payment methods. Knowing how to prevent credit card chargebacks could reduce the number of returns that a company may be required to refund.
About Credit Card Chargebacks
For consumers who want to pay for goods and services without using cash, credit cards offer a safer and a more convenient way to shop.
Credit card issuers offer a plethora of benefits to entice consumers to carry store branded credit cards, gas station credit cards and a variety of bank-issued credit cards that display the Visa or Mastercard logo.
Customer satisfaction, billing errors and fraud protection are among the top benefits that credit card issuers support toward helping a consumer resolve a dispute.
After submitting a dispute in-store or via written correspondence, a chargeback is the next step that a consumer takes toward obtaining a refund for a purchase that was made with a credit card.
According to the Federal Trade Commission, consumers are legally entitled to dispute credit card charges with a seller or a card issuer, if erroneous billing or a problem with the quality of goods or services occurs.
For instances where a credit card issuer agrees with a cardholder’s dispute, a merchant’s account will be debited for the amount charged. Additionally, the credit card processor could impose a chargeback fee against the merchant for up to $100.
Therefore, it is wise for business owners to subscribe to several practices that are designed to prevent credit card chargebacks.
Follow Payment Processor Guidelines
While chargebacks might seem inevitable for most business industries, it is a great idea to follow each payment processor’s guidelines.
Ensure that cashiers are aware of the impact that credit card chargebacks will cause for the business. When employees understand the severity of certain business losses, it might heighten the awareness for a stronger frontline defense.
When required, cashiers who are very thorough can verify that a shopper signs a credit card receipt. Also, instructing cashiers to verify that a purchaser’s signature that is on the back of her credit card matches her signed receipt is important, too.
A quick inspection of a credit card for the expiration date, security pin and for possible damages from tampering with the card are also worthwhile practices.
Provide Clear Descriptions for Products and Services
Chargebacks are more likely to occur when a borrower spends hard-earned money for an item that is considered less valuable than anticipated. Whether an item is purchased in-store or online, a customer who unboxes an item and experiences buyer’s remorse has the surest path toward a refund request.
Present clear descriptions that give customers an abundance of insight for packaged goods or for unboxed items, such as a bike or clothing.
Service-based businesses should also subscribe to clear and concise details for customers.
Using a contract or a signed order form which details the specific services that a customer will receive is useful toward reducing chargebacks. During a payment dispute, a merchant can present a list of items to the credit card issuer that were agreed upon with the customer.
Fight Credit Card Fraud With EMV Chip Card Readers
Credit card fraud can result in a massive number of chargebacks for business owners. Merchants who are still processing chip-embedded credit cards with information from a magnetic strip are not protected against chargebacks.
However, business owners can fight credit card fraud with EMV technology.
Maintaining credit card processing equipment that complies with the latest PCI standards could help merchants fight credit card fraud and identity theft.
Put safeguards in place to prevent credit card chargebacks could eliminate a large number of payment reversals.
It is a prudent idea to learn from ever changing scenarios and to adjust certain operating procedures, as needed, to avoid credit card losses.
For instance, if a trend develops, where customers are not receiving goods by mail, a merchant could ship future orders with a receipt attached for delivery confirmation.
Valued Merchant Services is a leading provider of secured credit card processing services & equipment.
Contact us today to get more information about affordable point-of-sale devices.