If you’re a business owner, you probably cringe a little bit whenever somebody mentions the word chargebacks. This is completely normal. No business owner likes to deal with chargebacks, but for some reason they have the tendency to keep coming in, slipping around the cracks even if you take steps to safeguard your business from customer misunderstandings and fraudulent purchases. If you haven’t had the misfortune to deal with chargebacks in your business yet, you may not even know what they are. Chargebacks are credit reversals that come about when a customer or client requests their money back after making a credit card purchase. It may not sound too bad, but they can cause a lot of hassle and undue stress for business owners. Chargebacks take up a lot of time and resources, and they can incur a lot of fees that will eventually add up if you have a lot in any given time period.
There are ways to prevent chargebacks from happening though, and taking a few extra steps can go a long way towards freeing your business from them. Most chargebacks stem from two different things: the first is a simple misunderstanding between the customer and the merchant, and the second is fraudulent intent on the part of the customer.
In the first situation, something occurred which was not fully explained to the customer, or which they did not understand correctly. For example, if your return policy isn’t very specific, the customer may think that they have 45 days to return an item when actually the time frame is 30 days. They decide they want to send the item back on day 37, find out that they can’t, and go initiate a chargeback because they feel like they were not treated fairly. Misunderstandings like this happen quite a bit, and the best way to prevent them is to make sure everything on your website is explained clearly in an easy to understand way. The same sort of misunderstanding can occur with shipping policies, product descriptions, product images, and a whole range of other factors.
The second reason chargebacks happen – fraud – is a little harder to prevent, but you can still safeguard your business if you make the right precautions. Chargeback fraud happens when a customer makes a purchase with a credit card, usually through an online transaction on a website, and then initiates a chargeback with his or her bank on the premise that the item never arrived, or it arrived damaged, or something of that nature. In reality, the item arrived in perfect condition and the customer is simply attempting to get it for free, but banks typically take the side of the customer in matters like this, which doesn’t leave merchants with a whole lot of wiggle room to fight back.
The best way to prevent this is to screen any customers that seem suspicious or who have a history of chargebacks. You can find some very thorough online databases of people who have a history of chargebacks, and after doing this you can decide whether or not you want to do business with that person.
Niika Best is a chargeback specialist who runs a firm which fights against chargebacks for merchants. she has got a reputation amongst the chargebacks specialists as the leading person who has been in this industry. If you would like to know more about Niika’s chargeback initiatives or how to fight a chargeback, please log on to her website