Chargeback 101
Causes of Chargebacks
One source of frustration of online merchants is Chargeback. Just when you thought that the transaction is already complete, here comes a written claim from the credit card-issuing bank, saying that the customer disputes a certain transaction and asks for a refund for the merchandise purchased or service availed. It is disappointing and at the same time, you may lose the money that you have earned from that transaction.
It is frustrating when a customer requests a refund. It makes you question your product or service and makes you wonder why the customer has stopped their transaction from going ahead. It could be a variety of reasons, for example, the customer may have found a better online deal on one of the many price comparison websites, such as Love Money. Alternatively, the customer could have decided they didn’t want the product after all, or it might just be a technical transaction error. You can reduce the number of Chargebacks to your business by identifying the problem and fixing it. This could involve you checking that the overall service is up to scratch and ensuring the online payment page is reliable and stable.
Online merchants may have come to hate it, but there are things that can be done in order to minimize the chances of having to deal with Chargebacks. The first step? Know what causes one. Take note that you can take the necessary actions if you know what you are dealing with. In this article, get familiar with the different instances that can result to Chargeback. Know what you need to watch out for:
Processing Blunders
A Chargeback can be due to improper processing procedure. It can be the result of errors that, in general, can be avoided should you pay more attention to detail. The absence of credit card at the time the sale is being processed can lead to mistakes such as inaccurate credit card information and duplicate charges or the customer is charged twice for a single transaction. In addition, failure to check if the credit card is beyond its “Valid Thru” date or not can also lead to problems when processing the transaction.
Online Fraud
A Chargeback occurs if the customer claims that he or she did not participate or authorize a certain transaction that was billed to him or her. It is also important to mention that in general, orders from the Middle East as well as Asia are potentially fraudulent.
Customer Issues
This involves customer dissatisfaction about the merchandise purchased or the service availed. A Chargeback arises if the customer is not contented or satisfied with the product or service. If the customer claims that he or she did not receive any merchandise or that the product received was not what was ordered, he or she may ask for a refund. It can also be that the customer is not satisfied with the service availed. These are just some of the customer-related concerns that can lead to a Chargeback.
With the burgeoning number of people who go online to purchase products or avail services, it is not surprising that instances leading to Chargebacks are also increasing. While this may be the case, it is worth-emphasizing that online merchants can do something about Chargeback. It is not entirely a bad thing. In fact, dealing with Chargebacks can help online merchants in the assessment of their businesses. They will be able to formulate improved processing procedures and strategies as well as more efficient management tactics. Nevertheless, it is crucial for online merchants to learn how to fight Chagebacks and lessen the risks of losing money. Find out what you are dealing with. Know how a Chargeback occurs so you will be able to work on it as soon as possible.
Chargebacks – Preventive Measures
Though the word Chargeback has a negative connotation for most people, it does not mean that online merchants cannot get something good and beneficial out of it. You may not know it, but dealing with a Chargeback situation can help improve your business. How? Dealing with it can help you assess the performance of your business. It can give you a hand in coming up with ways on how to improve your processing procedures and management strategies. This is the bright side of Chargebacks. The other side is something that you need to pay attention to in order to lessen the risks of getting frustrated and losing money in the process. In this article, learn some things to take into account when it comes to processing transactions:
• To avoid frustration, it is important to understand the Chargeback process. Learn how a Chargeback occurs and know how the credit card-issuing bank and the processing bank verify the validity of the customer’s claim.
• Make your terms and conditions and return policy clear to the customer. Ensure that the customer has agreed to the conditions and policy before making the order.
• Know what causes the Chargeback. If you know the reason/s why a Chargeback occurs, you will be able to take the necessary actions right away.
• Be more attentive when processing the transaction. Implementation of proper processing procedures can be a big help in minimizing the chances of having to deal with Chargebacks. In addition, completing a transaction properly can help build good reputation and better relationships with your customers.
• Deal with a potential Chargeback situation as soon as possible before it gets worse.
• Do not process transactions involving expired credit cards unless you have an authorization approval for the particular order.
• Be cautious of online fraud. In general, orders from Asia and the Middle East are believed to be fraudulent.
• Make sure to verify any claims of the customer.
• If a Chargeback arises, make sure to give your processing bank all the necessary information about that particular transaction. Keep communication lines open. Make it easy for the processing bank to get the information needed in settling the matter.
• Chargeback can be due to a number of reasons but generally speaking, it can be the result when the customer is dissatisfied with the merchandise purchased or service availed. Thus, do your part in making sure that the customer will not have any reason to cancel an order or ask for a refund. Create a good relationship with the customer. Be available to answer his or her inquiries and questions. Make sure to provide accurate information about the product or service. Indicate the terms and conditions and your return policy.
Take note that though Chargeback may seem unavoidable in the world of online merchant business, you can do something to prevent it from greatly affecting your business. You can fight Chargebacks with proper education and implementation of effective processing procedures. Pay attention to detail and know what you are up against so you will be able to lessen the chances of having to deal with Chargebacks.
What is Chargeback?
Technology brings us a lot of conveniences that you may never have thought possible. E-Commerce, online shopping, availing services through the net – these and a lot more are the result of the need to process things easier and faster. Ingenious, right? But just like everything else, the net can also be a source of disappointment for those who are relying on the internet for their business. Online merchants, for instance, need to pay close attention to transactions to avoid Chargebacks. In this article, know what a Chargeback is and its essentials.
What exactly is a Chargeback? In simple terms, this refers to the procedure wherein the credit card-issuing bank asks for a refund of merchandise purchased or service availed. The bank charges the transaction back to the online merchant.
The mere definition of a Chargeback is enough for online merchants to get frustrated. Just imagine this: you will have to deal with a transaction that has already been completed. Aside from the fact that dealing with a Chargeback can take a long time before it gets settled, you may lose the merchandise or the money, or worse, both.
This can happen in a variety of reasons, from customer disputes to fraudulent transactions. Some of the instances that can result to Chargeback are: duplicate processing (the cardholder was charged twice for the same transaction), authorization issues (the customer claims that he or she neither participate nor authorize the transaction included on his or her monthly statement), errors in processing the sale such as inaccurate credit card information, services not rendered, cancellation of order not processed properly, fraudulent orders, and incomplete processing procedures. A Chargeback can also occur if the customer is not satisfied with the product bought or service availed. If the customer claims that he or she did not receive the merchandise at the expected date, the product was damaged or that it was different from what was ordered. All of these can cause a Chargeback.
Online merchants are on the losing side when it comes to dealing with Chargebacks. As mentioned before, you may lose money as well as your merchandise in the process. However, you can fight Chargebacks and spare yourself from getting frustrated. It is important to do your part in processing transactions. Implement proper procedures in handling orders. Verification is a crucial step. This is to avoid fraudulent transactions. Compared to credit card-present transactions, online merchants need to put more efforts in verifying the validity of every transaction. Another thing that you can do is to provide the right information about your products and/or services. Make sure that your customer gets his or her money’s worth. On your website, indicate terms and conditions as well as your return policy. Make sure that the customer has read and understood these matters prior to processing the order.
Though dealing with Chargebacks can help in assessing the processing procedures of your business, the damage that a Chargeback can bring is nothing short of frustrating. Fight Chargeback by knowing what causes one and working hand in hand with the bank to settle the matter. Acquire enough knowledge about Chargeback and know how to prevent it.
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