Paying for products and services is so commonplace that most people don’t think twice about entering their credit card number in an online form or swiping it in a payment terminal. From big ticket purchases to everyday buys, such as lunch or a pack of gum, payment cards are the de facto choice.
The problem is that this constant swiping means that consumers sometimes forget how and when they’ve used their credit cards. Typically, this oversight is an honest mistake. However, the problem for merchants happens when customers realize they can beat the ineffective payments monitoring system and easily commit chargeback fraud.
By claiming that they don’t recognize the charge or remember making the purchase, customers often “game the system” and defraud merchants of their revenue. The best way to beat these defrauding customers at their own game is by providing extensive purchase details that shine a light on these consumer missteps.
By following our five tips on how to eliminate chargebacks through data sharing, merchants can put an end to consumer oversight and chargeback fraud. It simply comes down to this: equip customer service teams and card issuers with the information they need to prevent chargeback fraud and eliminate confusion.
- Provide Clear Merchant Details
Payment card statements are typically a blur of information. Customers scan them quickly, and when they don’t instantly recognize a purchase or a merchant name, they panic and respond with a transaction dispute.
Merchants should ensure that their company name displayed on the payment card billing statement is the name that is familiar to the customer. Merchants often use the name of a holding company or their business number, which only adds to consumer confusion over the purchase. It also supports a fraudulent chargeback claim, by allowing the customer to honestly claim they don’t recognize the merchant name.
Merchants should use a payment solution that supports inclusion of the merchant name, address, customer service contact details, and any links to warranty information and refund/return policies into the customers’ billing information.
- Have Accessible Merchant Contact Information
The easier it is for the card issuer to access merchant contact information, the better. Having the website details, customer service phone number and email address, along with details about the purchase provide a simple and direct method for the issuer to respond to the chargeback request.
Using an informative billing descriptor that includes as much detail as possible about the merchant and the purchase gives the issuer an advantage when dealing with a confused customer, or one who is attempting to commit chargeback fraud. Sharing this information with the cardholder in near real-time allows the issuer to better discuss the purchase in question and eliminate purchase confusion.
- Know Cardholder History and Details
Using a solution such as Verifi’s Order Insight allows merchants and issuers to have quick access to vital cardholder transaction and dispute history. Knowing cardholder details, including the date and time of the purchase, how often the cardholder makes purchases from this merchant, and how long the cardholder has been a client are all important data points.
Having this information allows the issuer to ask questions that can help determine if the disputed charge is valid or a case of chargeback fraud. The more information the issuer has, the easier it is to discreetly ask probing questions to determine the validity of the claim.
- Understand and Identify Buyer’s Remorse
Quite often, a customer may regret making a purchase. It’s only when the credit card statement arrives that the reality of the purchase sets in. To avoid paying for the purchase or commit fraud, the customer will make claims such as “I don’t remember buying it”, “it doesn’t fit”, or they’ll simply say, “I regret buying it.”
The merchant and the issuer need to be prepared for these kinds of statements, and to have the information available that can prevent a buyer’s remorse chargeback. Ensure the return/refund policy is clearly available and viewed by the customer, and that the product details are clearly displayed on the credit card statement.
By having this information available, the issuer and the merchant can prevent the customer from making invalid claims and completely avoid the chargeback representment process. Remind the customer of the refund/return policy and that they did receive confirmation emails about the purchase, which allowed them to cancel the order.
- Easily Accessible Purchase Data
When data about the purchase, the merchant, and the cardholder are shared between the merchant and the issuer, it is much easier to prevent chargeback fraud. Using a solution that provides the issuer with near real-time access to this information supports sharing of vital purchase information, resulting in front-end resolution.
When the customer disputes a purchase, Verifi’s Order Insight immediately shares the merchant and purchase details with the issuer and cardholder through the issuer-hosted mobile app or online banking portal. When comprehensive transaction history that includes the product description, merchant name, and how the purchase was made is available to everyone involved, most customer confusion can be eliminated. Additionally, when all the details about the purchase are made available in near real-time to the cardholder, it’s much more difficult for a friendly fraud or chargeback fraud claim to move forward.
Cardholder and Purchase Insight to Prevent Chargeback Fraud
There is one common theme that connects these five tips to prevent forgotten purchase claims: knowledge sharing.
The chargeback process is inefficient, disconnecting the merchant from the cardholder and the merchant from the issuer. This results in error upon error, confusion, and ultimately a drain on resources for both merchant and issuer.
When the issuer has quick and instant access to cardholder and merchant details, it’s much easier to answer questions from the cardholder about a purchase, preventing an unwarranted chargeback claim. Additionally, by providing clear and distinct details on the credit card statement about how, when, and where the purchase was made, customer confusion can be eliminated.
Knowledge is power. Sharing it over a robust and secure solution such as Order Insight can optimize this power. Stop customer confusion and restructure the environment that makes it easy for chargeback fraud to occur.