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6 Ways to reduce the risk of Credit Card Chargebacks

Credit Card Chargebacks
A chargeback is the reversal of a credit card transaction arising from specific problems. The purpose of chargebacks is to protect consumers from the fraudulent activities of merchants or others. It is different from a cancelled charge because cancelled charges are not fully processed, while a chargeback is fully processed and settled. As a result, a chargeback may require several business days to be processed by multiple entities. There are several reasons for chargebacks claims. The customer may simply wish to return the item or receive a damaged or defective item. They may have been charged for something they never received, or they could have been charged by the shopkeeper by mistake. Technical errors may have resulted in billing, or cardholder card information may have been stolen and used without their authorization. However, irrespective of the reason chargebacks is not a desired situation, since it causes loss of income, additional costs and some disciplinary action may be taken by credit card services. MyPaymentSavvy provides different payment solutions and the security that prevents your business from fraudulent activities, thus minimizing the risk of chargebacks. We have listed 6 ways for your business to reduce the risk of chargebacks.

Provide Contact Address

Credit card chargebacks can be avoided if buyers can easily contact you. Therefore, please provide an e-mail address or a telephone number, which your buyers can use to quickly clarify questions and ambiguities. If you offer high-priced items at a low price, you may also want to contact your customers. As such, keeping information about your buyers will also help you. It is also suggested to respond immediately to the queries from your buyers. Since any delay in the process might trigger doubts in your buyers and they may feel that solving their problem is not a priority for you. Better communication with your customers can help you avoid chargebacks.

Keep Complete Records

Not all chargebacks come from the scammers. There is a real possibility that the chargeback filed against you is valid and caused by your own actions. However, if you keep accurate records of customers’ credit card, its transaction date, the amount of product purchase, the term and condition applied to the product and purchase, authorization information, etc. you have a chance to question or decline the chargebacks. If you and your customer have signed some documents such as receipts or a contract, it can be helpful if you have been a victim of a fraudulent purchase. This contract can help you win a dispute against the person who is trying to take advantage of the chargebacks system.

Learn to spot the fraud

All merchants like to receive big orders. But it is unlikely that a fantastic order and unexpectedly huge is legitimate. Fraudsters know that they only have one chance to use their fraudulent card, so they stack a maximum of products in the order before the victim objects on his credit card. Most new customers usually make a small trial purchase before placing a large order. So be suspicious if the total amount of an order is above average - especially from buyers you have never had to do. A billing address that differs from a delivery address should also raise suspicions. So, it is necessary to pay attention to these details.

Train your staffs

If you are a business owner, it is necessary to train your employees on how to deal with the transaction that deals with-cards and without-cards to avoid chargebacks on credit cards. With the right training, your employees can be an asset in preventing frauds. Your employees should know what to do next once they spot a fraudster. They should know where to report it, like a mailbox or a hotline number.

Get in Writing

It is advised to do business in writing. In order to protect yourself from irrelevant claims and chargebacks, we suggest you do businesses through contracts or agreements on paper. You are required to spell out all the services that you provide for the kind of purchase that your customer is making. Your customers can fax or email the signed contract, or sign it electronically. The main motive is to get an authorization from your customer which comes in handy at the time of the dispute.

Follow the protocols

Every credit card or debit card has its own protocol that needs to be followed when you're accepting payment through it. If the purchase is made through the card at the counter, make sure you check the expiration date of the card and enter the security code that is on the front or the back of the card. Additional information of the buyer can help you in fightback the chargebacks claims. However, the protocol for card-not-present purchases such as online transaction or over the phone is different. To approve any online purchases, it is better to capture the IP address, digital signature, etc. of the buyer. Additionally, some protocols allow you to verify the identity through identity confirmation service which asks customers to enter an extra password to authorize their credit or debit card payment online.

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