Chargeback Prevention & Mitigation: Preparing Your Best Defense
Policies and procedures to protect your merchant account
As an e-commerce merchant, you know that chargebacks are just another part of the business. Odds are, every online retailer is going to experience a few chargebacks. In moderation, chargebacks are normal—even expected. But too many can ruin your credit card processing capabilities and even cost you your merchant account. This is why chargeback prevention is of the utmost importance.
The Common Reasons for Chargebacks
Chargebacks happen when a consumer contacts their credit card issuing bank to dispute a charge on their statement. Chargebacks can occur for any number of reasons, but here are a few common examples:
- The transaction was fraudulent
- A customer doesn’t recognize the charge or forgets the purchase
- A customer didn’t receive the purchases
- The purchases were damaged
- The product description was inaccurate or misleading
- A customer was dissatisfied with the purchase
- The charge on the customer’s billing statement differs from the price of the sale
Chargeback fraud is becoming more popular in the e-commerce world, with many fraudsters exploiting the chargeback process to get away with free goods or extra cash. Merchants should be especially vigilant toward chargeback fraud, as it can make online payment processing solutions harder to find.
5 Chargeback Prevention Tips
- Send email confirmations to your customers following orders and shipments. This will help eliminate miscommunication.
- Ship orders on time to prevent chargeback inquiries.
- Screen your payment gateway for fraudulent transactions.
- Require signatures on packages. This can help you present evidence if you attempt a chargeback reversal.
- Customize your billing descriptor with your business’s name.
More on Chargebacks and Payment Processing
As a global merchant services provider, Instabill is dedicated to educating merchants and consumers about chargebacks and how they can be avoided. For more on chargebacks, visit our blog to find the latest strategies on mitigation and prevention. To learn more about other services like our merchant accounts, simply contact us online today.