Chargebacks can be an annoying, expensive and time-consuming side effect that comes with accepting card payments. However, there are ways to reduce, avoid, even eliminate them completely.
One of the most common causes of chargebacks is when a customer cannot contact you to resolve an issue amicably. If a customer has a problem with something they purchase online and they cannot find your contact details, they are left with little choice other than to raise their concerns with their card issuer. Ensure your contact details are obvious and easy to find on your website, display them in the header or footer of each page, or within a dedicated ‘Contact Us’ page.
Use Clear Descriptors
For those of you who do not know, the descriptor is what appears on the card holders bank statement when they’ve used their card to make a purchase with you. You can reduce the likelihood of a chargeback by making your descriptor as clear as possible, if a customer can link their purchase with your company they won’t dispute it by mistake.
Avoid ‘Negative Option Billing’
‘Negative option billing’ is the term used to describe the situation where you automatically add customers to a paid subscription at the end of a trial period and do not give them a chance to withdraw from the service. This situation is guaranteed to generate significant numbers of disputes and we recommend avoiding it where possible. If you do still want to do this, just make sure you communicate clearly and offer an opt out.
Honesty is ALWAYS the best policy. Chargebacks most often occur when the product or service a customer receives doesn’t match up with what they were promised. Make sure you’re product descriptions and marketing messages are always clear and accurate.
Always Consider Refunds
Whether you like it or not, when a customer uses their card to make a purchase they receive additional protections. Card Issuers favour their customers and in most cases will offer refund solutions to your customers if you don’t. When this happens, not only does it reflect poorly on you, but will often lead to a chargeback anyway. It is wise to consider refunds more carefully, it can be cheaper, and easier than dealing with a chargeback at a later date and will also avoid negative reviews from unhappy customers.
Provide What You Promise, When You Promise It
Another reason people raise chargebacks is because they’re not getting a service or product when they expect it. Convenience is king and in this day and age we do not expect to wait months on end for our purchases. To prevent chargebacks from this, make sure you deliver what you’ve promised quickly and efficiently, or if you cannot deliver ensure you maintain regular, clear communication with your customers so they don’t feel neglected.