It’s Chargeback Season: Safeguard E-Commerce Merchant Accounts with Communication

It’s Chargeback Season: Safeguard E-Commerce Merchant Accounts with Communication

While we’re all (hopefully) sticking to our New Year’s resolutions, we’re offering a challenge to our network of competing partners and acquiring banks. When providing e-commerce merchant accounts, there is nothing like direct, one-on-one communication.

Sure, we get inquiries through every conceivable medium of communication: e-mail, Skype or live chat, and even social media. And we respond to every one of them – by telephone. Some merchants prefer to keep the conversation limited to e-mail or a form of online chat, which is their prerogative. There are specific questions we will ask and certain KYC documents that we need to pass along to our acquiring banking partners. When the conversation with a merchant is direct by telephone, the process is more streamlined, efficient and the approvals seem to come faster.

As merchants enter the peak season for mitigating chargebacks, we advise they take the same approach with their customers – direct communication when faced with a chargeback. It’s their best bet to find a resolution.

Disputes are best settled one-on-one. Here’s why:

There are times when a chargeback is the result of fraud or the result of an angry, dissatisfied consumer. Either or, it’s no secret that merchants risk losing their e-commerce merchant accounts if they receive too many. More often than not, however, chargebacks occur due to lack of communication or a misunderstanding.

Most consumers, even mildly dissatisfied with an e-commerce purchase or service, will simply telephone their credit card issuer, express their dissatisfaction and demand a chargeback rather than contact the merchant for a resolution. The majority of consumers are unknowing and unaware of the process it takes or the damage chargebacks inflict on a merchant. It’s a knee-jerk reaction that has lasting implications. Like it or not, the merchant would do well to contact the customer to educate them on the detriment of chargebacks.

We advise our merchants to embrace these situations. Direct contact with customers presents opportunities: to make a positive impression, to reverse a chargeback and negotiate a return or refund, or even solicit a positive online review.

Statistics you can’t ignore

We recently read that when consumers contact merchants in times of dispute, there is a favorable resolution in 60 percent of those cases. In 28 percent of disputes, a resolution is reached when the merchant replaces the product or issues a refund. It is only in 16 percent of disputes that a resolution is not reached.

If the customer is unavailable…

Making an attempt at direct contact, we feel, is a merchant’s first order of business when attempting to rectify a dispute. Merchants don’t always succeed, however, and are left to other, more defensive tactics to mitigate chargeback dispute.

  • Organize your inbox: It’s a good practice to save e-mails, particularly sensitive ones, but merchants should go further. Just saving e-mails, however, isn’t enough. Merchants are better off with an organized in box, with appropriately named folders and subfolders for vendors, customers and other key partnerships so that documents to be used to contest chargebacks are easily located. After all, merchants have less time to answer to chargebacks (30 days actually). Organization is key.
  • A merchant’s best friend: Protecting e-commerce merchant accounts begins with partnering with a reputable shipping company – the key to chargeback prevention. Select a shipper that offers mobile and e-mail alerts for vital transactions such as departures, arrivals and receipts. Merchants can go one step better and require an ID and signature from the recipient upon receipt of goods.
  • Consider 3D Secure processing: It’s one thing if a customer is dissatisfied with a product and files a chargeback. Merchant can handle such a situation how they see fit. Merchants that experience fraudulent activity which leads to bogus chargebacks, 3D secure processing is a very effective deterrent – and not the disruption it used to be.

E-Commerce Merchant Accounts with Instabill

E-commerce merchants oftentimes are burdened with chargebacks and cases of friendly fraud, to the point where absorbing only a percentage is their way to remain under the 1 percent/100 per month threshold. Though known for its vast offerings of e-commerce merchant accounts, Instabill is partnered with a chargeback prevention and mitigation firm that specializes in recovering revenue and passing on best practices.

Care to offer your tips and tricks for chargeback prevention and mitigation? Leave us a comment below.

For more on our international and domestic merchant account services, we prefer prospective merchants contact us by telephone at 1-800-530-2444.

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