Businesses have to deal with numerous cases of credit card chargebacks every day, meaning that millions of dollars have to be refunded to customers’ accounts, taking both time and resources to see these processes through. There are legitimate claims as well as fraudulent cases and a business may end up losing a lot of money in case of illegitimate chargebacks. Small businesses are mostly affected by these fraudulent cases and the following are surefire ways to minimize chargebacks in your business and how to efficiently handle these cases.
Set clear policies
Chargebacks can be very frustrating for small businesses especially if they have policies that are not clear to customers on refunds and fulfillment of orders. Having unclear policies escalates the number of chargebacks a company has to handle. A business has to come up with a distinct statement that is to be displayed on their website that makes security controls clear and tools to protect their customers. This usually discourages fraudulent claims and therefore reduces the number of chargebacks.
Order fulfillment information and order summary should be sent via email a day after a purchase has been made as this ensures that processing timeframes are clear to clients. They should state in the order summary whether the items are in stock or are back to back orders and this information is used as a reference when charges get disputed.
Learn how to identify doubtful transactions
There are signs that a company can watch out for to identify suspicious transactions and one sure way is when clients hesitate to give personal information when asked. This should raise an eyebrow. They should also be able to give matching information about their shipping and billing addresses although at times genuine customers may be cautious to give such information.
A company should also be on the lookout if a client makes urgent orders to be delivered overnight that appear random and may want one of every item whether in stock or not. In the case of such activities, it is advised to start on chargeback prevention procedures immediately to help you fight fraudulent charges.
Offer great customer care
You can cut back on refunds by seeing to it that you invest well in customer care representatives who are able to handle clients in a professional way and offer alternative solutions to a problem instead of having to return an item. This reduces the number of chargebacks.
Set up fraud screening measures
Technology now offers measures that a company can use to assess risks and handle fraud cases that may arise in credit card transactions. This technology is able to detect unusual activity when a particular sale raises too many red flags and suspends the transaction. If a company is unable to develop its own screening methods, they can use specialized independent companies who have the experience to handle fraud screening.
Educate customers on chargeback procedures
A company can adopt settling chargeback disputes by informing their clients on chargeback procedures. This makes customers know that they can avoid such in future by being sure of their purchase next time. The company also benefits when they communicate with their clients one on one at is strengthens their relationship and trust. This information can be sent via email, monthly newsletters or even over phone calls.
Delay billing on orders
Banks and credit companies advise companies to hold on billing their customers until after the orders are shipped. This means that they take funds out of clients’ accounts after they release the order which gives a company time to detect fraudulent activities and address them before they become a chargeback.