A Guide To Chargebacks

Published by BMT Micro on

 

Credit card chargebacks are an annoying and costly part of running an eCommerce business. Chargebacks occur when a customer disputes a charge they see on their credit card statement in order to get their funds back. If their dispute is deemed valid, the eCommerce merchant is required to refund the amount, as well as pay the processing fee. Not only is a chargeback costly for the retailer, it is an annoyance for everyone involved and can come with negative side effects. The key to minimizing chargebacks is to fully understand them, and to create a business that excels in customer satisfaction.

Why Chargebacks Occur:

Chargebacks can be caused by a number of reasons. One of the more obvious and frequent examples are fraudulent charges. Fraudulent charges happen when a criminal gets a hold of a customer’s information and makes a purchase under their name without their knowledge. If the victim catches the charge, they can report it to get their illegally drawn funds back. Other common reasons chargebacks occur are that the customer never received what they had ordered, the goods were defective or not as described, or they simply had buyer’s remorse when the purchase arrived. Once in a while, they happen because your name is not clear on their bank statement, and they are confused about where the charge came from.

Sell High-Quality Products:

One of the best ways to avoid getting chargebacks is to actually sell what you say you are selling. Do not try to make your product sound better or different than it is when advertising it. Customers will appreciate your honesty, rather than having to deal with a defective product. Make sure you are honest in the product description so that they will be excited rather than disappointed when receiving it.

Ship Orders On Time:

If your package doesn’t arrive when it says it will, the customer might no longer need or want it. Often, customers will order online for certain events, so if you miss that deadline they are much more likely to return in. It is also possible they think that they are getting ripped off, or that the package got lost and they are not going to receive it. While you cannot control what happens after the package goes out in the mail, you can make sure that you send it out on time and keep the customer updated with a tracking number and alerts.

Be Clear:

After your customers make a purchase from you, they should receive an email confirming what they ordered, how the charge will appear on their credit card, and tracking information as soon as you are able to provide it to them. Make sure contact information is easily accessible in case they need to get in touch about an order. If they have any issues with their order, be prompt about your response to help prevent a chargeback. Additionally, making your return policy clear and easy to find on your website will help your customer handle returns directly through you, rather than having to file a dispute.

Perhaps the most important part of chargeback prevention is to make sure that your customer’s information is safe with you. Make sure you are using the highest safety standards to ensure customer’s trust and to allow their purchasing process to go smoothly. Chargebacks happen, but by being clear and implementing safety procedures you can minimize them. To view BMT Micro’s privacy policy, you can view our website here.