Chargebacks are a hassle for everyone involved—cardholders, merchants, processors—we all feel the blow of a chargeback. Funds are held, fees are incurred, and patience’s are tried. We’re all sick of them, so let’s nip those pesky chargebacks in the bud.
How, you ask? Here are just 5 best practices to prevent chargebacks on your end AND to avoid any (gasp!) fraudulent claims by dishonest customers. Yup, that happens—yet another reason it is best to be preventatively proactive.
1. One and done. Ensure that transactions are entered into the POS terminal or gateway only once. Mistakenly duplicated transactions can result in chargebacks that could have easily been prevented with a little attention to detail. This is one of those cases where being a little persnickety can be a big help (that, and it’s fun to say).
2. Make time to sign. Whenever possible, obtain the cardholder’s John Hancock at the time of the transaction. If the cardholder chooses to dispute the charge or even cite fraud, a signed receipt or invoice on file can be your saving grace.
3. Read them their (refund) rights. Many chargebacks occur when a cardholder is unable to get a refund for a product or service they’ve paid for, and are for some reason unsatisfied with. To avoid this, inform the cardholder of all policies regarding refunds or cancellation policies at the time of the transaction. Have your return policy pre-printed on all receipts, or make sure to write down the date items must be returned by.
4. Time is of the essence. Settle or batch transactions as quickly as possible to avoid late presentment chargebacks. Rule of thumb: always settle within 1-5 days after the transaction date—the sooner the better! To make it even easier on you, all Arrow Payments gateway merchants are set up for daily automatic batches, unless otherwise requested.
5. Set a date. If a customer wants to cancel a recurring transaction which is billed monthly or annually, make sure you respond to their request BEFORE the next billing cycle. Failure to respond to cancellation requests on time will most certainly lead to chargebacks from unhappy ex-customers.
The best way to prevent chargebacks is by communicating with your customers. If they aren’t thrilled with a service you’ve provided, tell them about your refund or credit policy. If a product they have ordered has been delayed, tell them when they can expect it.
Arrow Payments is a Simply Better way of processing online payments.
Have a question? Tweet Antonia at @ArrowPayments