Learn how to aggressively prevent chargebacks from occurring and recover funds lost to chargebacks with this free white paper.
Chargebacks are often viewed as a cost of doing business and many merchants believe there is nothing they can do about chargebacks. Nothing could be further from the truth. Aggressively preventing chargebacks from occurring and recovering funds lost to chargebacks should be a priority for every merchant.
To recover funds lost to the chargeback process, the best way for a merchant to contest a chargeback is to give the bank evidence that proves the transaction was authorized and that the identity of the customer is the same as the cardholder.
Unfortunately, resolving these disputes takes time – and during this time, the revenue from the sale is withheld from your account. Time spent on these tasks is time away from making sales and supporting customers.
Winning the chargeback battle
So how should a merchant prevent chargebacks from occurring and also recover funds lost to chargebacks?
According to Matthew Katz, founder and CEO of Verifi, Inc., there are overlapping strategies a merchant can employ to reduce and recover the costs of chargebacks:
• Improve the process – streamlining workflow and eliminating human error reduces the time and resources needed to process a chargeback. Automation allows for merchants to remain current on credit card processing rules and make the dispute process much simpler.
• Prioritize – Businesses should have a fight or flight policy built into the chargeback process. It makes no sense to spend more time disputing a chargeback than one would incur in chargeback fees.
• Data control – Collecting information from chargebacks allows the merchant to adjust business practices if necessary and identify internal issues.
• Clear billing – By including a URL or contact number in the descriptor field on bills, it makes it easier for customers to recognize purchases made with their credit cards and reduces the change of a mistaken chargeback by a customer that thinks s/he has been incorrectly charged.
• Fix operations – Excessive chargebacks may indicate problems in operations. Whether it is a quality control issue with merchandise, ineffective or misleading product marketing or another root cause, identifying and addressing these issues can significantly reduce the occurrence of chargebacks and recover funds lost to chargebacks.
• Outsource – Tasking a third party with all or some of the chargebacks a business incurs allows the business to free up resources and valuable time that can better be spent on running a successful enterprise.
Regardless of whether or not you choose to implement these changes, it is imperative to seek new ways to minimize chargebacks. This white paper explores ways to improve your chargeback dispute process.