Your e-commerce business is thriving. You’re well under the 1 percent/100 per month chargeback threshold. You’re starting to think, ‘Do I really need to fight chargebacks?’
We came across this question from a subscription merchant in an online forum and it generated more than 25 responses. The majority of the responders constructively answered ‘Yes,’ and offered supportive suggestions as to why. There were some terrific, proactive responses, a few of which we offer below.
Failure to Fight Chargebacks is Lost Revenue
Let us ask a question:
Since your online business is consistently profitable, instead of absorbing the share of chargebacks – however small – why not put the equivalent of those losses into resources that would identify the reasons for those chargebacks?
Merchants should think of chargeback mitigation as a revenue stream about to flow openly.
Send a Message to Your Acquirer
The most impressive response we read in the thread was this:
‘Because your processor can cancel your account at any time.’
Consistently remaining under the 1 percent/100-per-month threshold is commendable, especially considering Visa’s new protocol in January. Merchants, however, need to remember that their acquiring bank can close a merchant account at any time, for any reason or no reason.
So who is more likely to have their merchant account terminated, the merchant indifferent to chargebacks or the merchant fighting chargebacks and has the results to show for it?
Translated, it’s simply good business.
Beware of the Power of Reviews
Consumers’ voices are louder than ever and their reach is far. To find out what consumers are saying about a product, all you have to do nowadays is type the company’s name into a search bar, followed by the term ‘reviews.’
One response on the thread discussed the perils of having a common theme on a reviews site or complaints board.
“I read comments from other people before making some purchases and if there’s a theme in the comments suggesting the company makes it hard to cancel a subscription, I don’t subscribe,” the post read.
How Do You Fight Chargebacks?
As a payment processor for high risk industries, Instabill often encounters online businesses that struggle with chargebacks, and merchants determined to mitigate them.
What is your strategy? Do you contact your customers by phone or e-mail? Are you successful in reversing chargebacks? Please leave us a comment below.