What Is A Chargeback?
Merchants who accept credit cards for business should use the utmost care when handling customers’ money and purchases. Not only do you want to keep your customers satisfied, you also want to avoid hefty fines and devastating loss that can occur should there be any dispute over a transaction. Chargebacks involve a card holder disputing a charge made to his or her credit card. Merchants can lose the sale in addition to paying chargeback fines. Read on to learn more about chargebacks, including common reasons for chargebacks and how to prevent them.
Common Reasons for Chargebacks
A chargeback may be issued for various reasons. For example, a card holder may not recognize a charge on their credit card statement. Merchants can also receive a chargeback if customers receive damaged or broken merchandise or if the customer returned an item but did not receive a refund. Another common reason includes fraudulent activity, where the customer’s credit card information was stolen and used without consent. Customers can also dispute charges if they never received the product or service, or if the product is not as it was described.
Fortunately, there are many ways to avoid potential chargebacks. If an authorization request is denied, do not complete the transaction. When entering in transactions, be sure that they are only processed once and any duplicate sales are voided. Keep customers informed on the status of their transactions, and ship merchandise before processing sale transactions. Obtaining the card holder’s signature during card-present transactions can prevent chargebacks for “no signature.” Also make sure that your customers are aware of policies regarding refunds, service cancellation and returns, so that there is no confusion later.
By providing additional information regarding transactions, many chargebacks can be resolved easily. If a customer disputes a charge, try to supply as much information as you can. Respond as quickly as possible, and address all of the card holder’s claims promptly and completely.