How to avoid chargebacks
When business is booming and you’re cashing in, it can be easy to forget about chargebacks. All business owners will face chargebacks at some point in their career however it’s vital that you keep on top of them. If chargebacks get out of hand, your business can face huge financial losses.
So what exactly are chargebacks?
Chargebacks occur when a customer asks their credit card issuer to dispute a charge.
A customer may dispute a charge for a whole host of reasons, these can include;
- Your services or products being purchased by someone fraudulently who is using a customer’s identity.
- Your customer doesn’t recognise the charge and doesn’t remember making the purchase.
- They never received an item.
- The customer is dissatisfied with the product or service they received and feel it was incorrectly advertised or sold to them.
How to avoid chargebacks
You can avoid chargebacks by always following best practices and ensuring that your customers are happy and satisfied with the product or service which they receive from you.
Below are our top tips for reducing the number of chargebacks your business receives.
Make your business name clear
Have you ever purchased something from a shop, then a day or two later looked at your credit card statement and seen a transaction from a company name that you don’t recognise at all?
When this happens a customer will call up their credit card issuer and explain that they don’t recognise the charge or remember making the purchase, this is because your business name looks totally random.
To avoid this chargeback scenario make sure your business name is clear and relevant to what your business does, this way when you show up on your customer’s statement they will always remember their transaction.
Be crystal clear in your marketing
As we mentioned above, customers will call their credit card issuer if they believe they have received a product or service which wasn’t as it seemed when they were sold to.
To work your way around this issue always ensure that your items are top quality or at least are as described or pictured on your website. Don’t post an image that you haven’t taken of your products and don’t oversell your product this will only lead to disappointment for your customer.
Know how to spot fraudulent activity
There are a few warning signs which can indicate if something fraudulent is happening when a customer purchases goods or services from you.
If you can spot these, you can prevent chargebacks that occur when your services or products are being purchased by someone who is using a customer’s identity. These include;
- If the credit card security code isn’t correct.
- If the billing or shipping address do not match.
- The order is for an unusually large sum of money.
- Lots of small transactions are made in a small space of time from the same card number.
If you suspect fraudulent activity contact the customer and ask them for proof of identity, if they can’t supply it do not go ahead with the transaction.
Rethink your payment solution
Some payment solutions are hot on spotting fraudulent activity and others simply take the payment without a second thought.
If you’re unsure about which solutions are best for keeping your business safe and avoiding chargeback fees, contact NovusPay. We will compare the widest range of payment solutions in the marketplace to help you find the best possible package customised to your needs as a business, saving you money on card processing fees. This means you can always take payments with peace of mind that you’re protected.