According to the recent Javelin & Strategy Research report, The Chargeback Triangle, chargebacks were a $31 billion problem in 2017. Unless this cycle of costly chargebacks is broken, the problem will continue, if not worsen, in 2018.
The cost of transaction disputes is not limited to merchants and issuers – consumers also suffer. Remember, many consumers file chargebacks because they simply don’t know whom to contact with their questions about a credit card charge, or they get frustrated when their questions go unanswered.
On the positive side, there are some very effective ways for merchants and issuers to reduce chargebacks. We’ve put together some valuable tips for you to read on reducing and even preventing chargebacks, which can be readily implemented to help protect your revenue and improve customer loyalty.
How to Reduce Transaction Disputes and Chargebacks
- Support information-sharing. Engagement in sharing transaction information between merchants and issuers will streamline the dispute process and help avoid chargebacks.
- Issuers should connect consumers to merchants. When the dispute involves questions about the quality of goods or services, the merchant is the best and most logical contact point to effect a quick resolution.
- Merchants need to communicate proactively. Positive engagement initiated by the merchant, even after a chargeback, goes a long way to help bolster the merchant-consumer relationship.
- Ensure Customer Service has relevant data. The more information the customer service team has for the initial inquiry, the more effective the dispute resolution process can be. In some cases, customer service can resolve a dispute in a single phone call.
- Give consumers control. With an app or other tracking tools, consumers can self-monitor the transaction resolution process. This reduces the number of calls to and from customer service.
- Always confirm the transaction details. Merchants should send a confirmation email that provides complete transaction details and allows the consumer to make changes or cancel the transaction.
- Track and follow the purchase. When the order is ready for shipment, the merchant should send a shipment notification email. This reminds the consumer of their purchase and allows both the consumer and the merchant to track the delivery.
- Remember social media. Merchants and issuers need to remember that consumers use social media channels to ask questions, voice complaints, and provide feedback. Be responsive to concerns to avoid negative reviews or public complaints.
- Be honest and forthright. Consumers appreciate honesty and consistent follow-through on merchant and issuer promises. Making that extra effort goes a long way towards strengthening the customer relationship.
Contact the Verifi team to learn more about how our collaboration solutions can help protect your revenue and improve customer experience.