Chargebacks are an unfortunate reality in the eCommerce industry, and you’re probably no stranger to them. No matter what product or service you’re selling, there’s a chance that it could be rejected by your customer and voided as a chargeback.
Chargeback prevention is the best solution to fighting such transactions, and this article is going to give you all the tools and strategies you need to avoid chargebacks!
What Is Chargeback Prevention?
Chargebacks are those pesky transactions that occur when buyers dispute charges on their statements. It’s a huge problem for eCommerce businesses that can lose millions of dollars to bad customers and dishonest criminals every year.
While chargeback prevention is a seemingly simple solution, it’s not always as easy as it sounds. In fact, some merchants find themselves fighting chargebacks year after year only to lose a significant amount of money each time they arise. The process of chargeback prevention is all about taking precautions before the sale in order to avoid malicious or fraudulent transactions from occurring in the first place. Many companies already use a chargeback management service that you can find at Chargebackhit.com. This service will help you prevent, resolve, and recover business and grow revenue globally.
Why Preventing Chargebacks Is Important
To say that chargebacks are detrimental to business would be an understatement. They can damage your reputation, cause you to lose money on each transaction, and hurt your sales figures in the long term.
Moreover, chargebacks generally result in a lower credit score for your business. While having chargebacks isn’t inherently bad, it affects your business’s image and reputation with customers. Although this doesn’t have as much of an effect on consumers as it does on businesses, chargeback prevention is still essential to your long-term success. That is why preventing chargebacks is so important for any type of business.
Tips On How To Prevent And Avoid Chargebacks
The best way to avoid chargebacks is to follow certain guidelines and avoid making the same mistakes over and over again. This is where things start going wrong for many eCommerce businesses.
In order to protect yourself from chargebacks, you must learn how to prevent them in the first place. The tips in this article should serve as a good reminder of what not to do and help you set up a system that will steer your business clear of chargebacks in the future.
Sell High-Quality Goods Or Services
Selling high-quality goods is one of the best ways to avoid chargebacks from occurring in the first place. If you sell poor-quality items, the chances are that your customers will use it as an excuse to dispute the charges on their statement and initiate a chargeback against your business. Most payment processors and banks take this into account when deciding whether or not to approve a transaction.
Prevent Criminal Fraud
There are criminals out there who will try to commit fraud and steal your customers’ personal information in order to charge their payment card with stolen or fraudulent funds. If you’re going to run an eCommerce shop, set up a fraud prevention program that reduces fraud in purchasing activities as quickly as possible.
Fulfill Orders Promptly And Accurately
Sometimes chargebacks occur due to poor order fulfillment or shipping times. For example, if a customer doesn’t receive an item in time, they might initiate a chargeback on their statement just to get their money back. A good way to prevent this from happening is by providing clear shipping and delivery estimates so you can avoid chargebacks of this nature. Also, ship orders out as quickly as possible, especially during peak times like the holidays.
Use Clear Billing Descriptors
Billing descriptors are often one of the first things that customers look at when deciding whether or not to file a chargeback against your business. If you’re looking for ways to prevent them, make sure that your descriptors are clear and concise. Try adding an actual number or link to the free shipping option instead of using words like “free shipping” on your order page.
Write Customer-Friendly Policies
There’s no better way to prevent chargebacks than by creating a customer-friendly policy. If you already have one in place, make sure it’s transparent and easy to understand by creating a FAQ section on your checkout page that explains it in detail.
Provide Exemplary Customer Service
Another tactic for chargeback prevention is to provide excellent customer service. Make sure that your representatives are courteous and attentive towards their customers. Additionally, make sure that you can answer any questions they may have about the product or service in question before they start the transaction process.
Use Order Validation And Prevention Alerts
Another way to prevent chargebacks is to use order validation and prevention alerts. If a transaction looks suspicious, rest assured that your payment processor will flag it before going through.
Respond To Invalid Disputes
This is where a lot of companies go wrong. Many eCommerce merchants ignore claims of any kind, even if it’s just a simple typo or misunderstanding. This is why it’s important to respond to each and every claim that comes in, whether or not you believe it’s invalid. Doing so helps minimize the chances of your sales record being damaged and prevents longer fees from being levied against you later.
The Bottom Line
Chargebacks can be a nightmare for your eCommerce business. However, they’re easy to avoid if you follow the guidelines outlined in this article. By avoiding common mistakes and taking extra precautions, you can keep your business safe from chargeback fraud and put yourself in a much better position to succeed in the future.