3 Tips to Reducing Chargebacks
When it comes to reducing chargebacks, the same rules that apply to fighting them also work to prevent them. Three of the most popular recommendations provided by Visa and Mastercard to fight and win a disputed chargeback include proving that there was communication between the merchant and consumer, proof that the customer agreed to purchase with a signed sales receipt or similar substitute, and matching evidence of cardholder information and their order details.
A common sense approach for any merchant seeking to reduce incoming chargebacks would be to institute these requirements as policy into their business. Not only will the following three strategies help protect you from getting more chargebacks, but they’ll also provide you with effective defense tools you can use long term.
1. Engage in communication. Less isn’t more on this topic. Send out reminder emails to allow a simple, yet effective communication tool for your customers needing to contact you (once a month is sufficient). Provide customers with a 24/7/365 communication solution if your business is conducted online. These options can include email support, telephone operators or online account management tools. If your store is open for business around the clock, be prepared to provide communication resources as well.
2. Use a web-based CRM program. This usually provides auto-responder options for sending emails based on a predetermined schedule. If your business engages in recurring billing models, this option is highly encouraged to curb chargebacks. A major reason for customers turning to their bank to cancel a subscription or obtain a refund is due to lack of time. The easier you make it for your customers to contact you, the less likely they are to seek other means for assistance.
3. Require a signature upon the delivery of goods. A signed delivery receipt is one of the most popular recommendations for online retailers. The signature, in addition to information gathered online, helps relieve merchants of any wrongdoing in the resolution of chargeback disputes. A signature can often take the place of a card swipe transaction receipt, making your sales much more secure.