Partner Article

Five Ways to Prevent Business Chargebacks

Chargebacks can be a real pain in the side for small businesses. A chargeback happens when a consumer contacts their credit card company and stops payment on their purchase for various reasons. Not only will this reverse the transaction, but you will be charged a fee and possibly even be out your merchandise as well. According to a recent article about profitable customer experiences , “If a vendor has products and services that fulfill my business needs (and wants), a knowledgeable sales team, and a helpful, easy-to-access contact center, I am more likely to buy from that vendor again.” These attributes can also prevent chargebacks. Below are five tips to help you

1.Identify Your Business

Identify theft is becoming more common than ever. Therefore, consumers will dispute charges that appear on their credit card statement with no clear indication of the merchant. Make certain that your company name appears as part of the descriptor on your customer’s statement. This means that if your business is Bill’s Bikes, you don’t send charges through William Smith LLC, your corporate name. This practice literally invites chargebacks and disputes.

2. Invite Contact

By making certain that your contact information is clearly displayed on all your business communications including your website, business cards and receipts, you will make it easier for customers to contact you before they decide to file a dispute with their credit card company. Additionally, make sure that your dispute and return policies are clear. Having a staff that is well-skilled in customer service will also aid in having disputes directed toward your business rather than the credit card company.

3. Authorization Procedures

Make sure that you and any employee that will be handling customer purchases knows proper credit card handling procedures. If a card is expired or is declined, don’t complete the sale. Checking the back of the card to compare signatures is also a must.

4. Require a Signature

If you sell products online or offer a delivery service for your customers, be sure that you require a signature upon delivery. This may be a minor inconvenience for your customers, but it is yet another way to protect yourself against fraudulent claims. Unscrupulous people will deny that they received delivery of their product and, without a signature to confirm delivery, you won’t have a leg to stand on when it comes to disputing a chargeback.

5. Perform Quickly

Chargebacks can be avoided by completing orders quickly. Run the credit card immediately, pack and ship items on time and communicate with customers as soon as possible. Your customers are far less likely to dispute a sale if you maintain contact. If an item is on backorder, make certain that you make your customer aware of this fact. If a customer emails or phones you with a complaint or dispute, don’t put off handling the situation. The faster you act, the less likely you are to experience a chargeback.

Chargebacks are expensive for businesses of all kinds. Not only will you be subject to fees, but you will undoubtedly have lost your merchandise. The best way to avoid the hassle of chargebacks is to prevent them in the first place. While no method is foolproof, following the five tips above will go a long way toward protecting your business from the chargeback nightmare.

This was posted in Bdaily's Members' News section by Suzena Williams .