The merchant-customer relationship appears simple in theory. Provide your best service and products, and invite them to come back for more. However, even the simplest of relationships can become complex and fraught with confusion, often materializing as friendly fraud, disputes, and chargebacks, resulting in loss of customers and future business.
Add the issuer into the mix and the merchant and customer relationship can devolve into a dysfunctional triangle of three parties working against each other to resolve a transaction dispute.
What Customers Want
Customers want every aspect of their online shopping experience to be easy. What was once a novelty or costly VIP experience has become a common expectation. That’s why customers are quick to part from a new merchant at the first sign of complication they encounter at any point during the entire transaction process. Here’s a short list of customer expectations:
- Convenience. One-click or swipe purchase functionality, immediate payment verification, and the ability to buy anywhere at any time.
- Security. Secure checkout options, stored passwords, and instant credential verification.
- Confidence. Comfort in knowing the merchant has the process in place to make shopping easy and that they are protected from fraud.
- Simplicity. A consumer-friendly website, multiple payment options, and an outstanding app or mobile experience.
- Service. 24/7 customer service, including timely shipping and delivery information. Fast responses to email communication and purchase inquiries.
Delivering what customers want is certainly not easy. Factor in that the evolving omnichannel marketing and payment environment comes with risks – including chargebacks, cybercrime, and friendly fraud – and the merchant’s job gets even harder.
Why Chargebacks Are Still a Problem
It all comes down to data. While merchant databases are packed with robust customer and transaction information, that data is either vulnerable to fraudsters or underutilized by merchants in the fight against chargebacks.
Merchants and issuers do not have to accept the growing chargeback problem, because they have tools available to manage disputes much more effectively.
- Communication. Merchants and issuers need to communicate. When a customer disputes a charge, issuers need to act quickly. Merchants must be willing to share transaction details with the issuer, so they have the information on hand to resolve the dispute before it escalates to a chargeback.
- Compelling evidence. The most effective way to address a transaction dispute is with compelling evidence. Make sure you know where and how your data is stored, and have a system in place for easy access to achieve a successful chargeback representment.
- Effective business practices. This includes purchase confirmation emails, clear billing descriptors, detailed refund/return policies, updated website product descriptions, tracking/delivery information, etc.
- Resources. Give issuers the information they need to put customers in touch with your customer service team. In more than 8 in 10 cases, contacting the merchant first prevents a chargeback.
Keeping consumers happy is an ongoing challenge that begins and continues with excellent communication throughout the entire purchasing experience. When you help ensure that the right people have the right information at the right time, you can resolve a simple transaction dispute before it becomes a chargeback. Do this well and you can turn a potentially brand damaging experience into a brand building opportunity.