In a tightening economy, back-end fulfillment costs such as chargebacks—dispute mechanisms credit card customers use to reverse transactions—comprise a line item worth scrutinizing.
Depending on the volume of chargebacks a cataloger is hit with in a set time period, fees (which are levied on a merchant) can run from $20 up to a whopping $150 per chargeback.
“To say the least, chargebacks can get very expensive for merchants,” says Scott Martin, chief operating officer of EPX, a New Castle, DE-based electronic payment processor.
Here’s how catalogers can reduce chargebacks generated from either customer disputes or outright fraud.
Tips to Reduce Customer Disputes
“Try not to look at chargebacks as rejected transactions but as customer comments,” says Nick Baxter, president of First of Omaha Merchant Processing, an Omaha, NE-based payment processor. “[They] tell you that your customers weren’t happy with some portion of their interaction with your company—whether it was the merchandise, shipping, billing or something else.”
Steps catalogers can to take to help reduce their chargebacks from dissatisfied customers include the following:
*Manage customer expectations, including when customers can expect the products to be shipped to them, the condition in which the items should arrive, and any other terms or conditions, says Martin.
*Make your purchase descriptors clear
and unambiguous. Customers looking at the purchase descriptors on their monthly credit card statements should be able to easily recognize your catalog company’s name, says Baxter. Remember, it may have been up to 30 days since the customer made the purchase, and he or she may not even recall making it. Any help you can offer to jar memories may reduce your chargebacks.
*Add to your descriptors a toll-free number for customers who have questions. “Then staff that customer service line accordingly,” says Baxter. “We’ve found that many customers who pursue a chargeback say they first tried to call the merchant to resolve the issue, but couldn’t get through on their phone lines.”