Chargeback Protection How Companies Can Stay Safe

Written by Small Business Magazine on October 10, 2016. Posted in High risk merchant account, Payment processing services, Secure payment processing

Card not present transaction

Today, any company that offers credit cards as a method of payment for customers faces the threat of chargebacks. Typically, a chargeback is when a customer requests a credit card issuer to reverse the amount for an order they made from you to get the money back. Initially, this was put in place to protect customers from unscrupulous merchants. Nowadays, customers have taken things past the edge and can initiate a chargeback whenever they want. And this impacts many businesses. The good thing is that you can benefit from a chargeback protection and here is how.

Get the Reason for the Chargeback

Chargebacks are designed to be easy and automatic, but they must have a reason. Therefore, when requesting a chargeback, the customer must state the reason to the card issuer, who in turn notifies the merchant. The most common reasons include fraud, quality, clerical and technical. Most common chargebacks usually stem from fraud and customers who believe that they have been charged without permission can call the issuer. However, most people can merely allege that a fraud occurred when it’s not the case.

Document All Credit Card Orders

Documenting all the orders made using credit cards is one of the sure ways to protect your businesses from frivolous chargebacks. A physical proof will help to prove that a customer authorized the charge. When the customer’s credit card is not signed, ensure to request for an identification such as a government issued ID and a driver’s license. When a customer makes an order via the phone, it is also helpful to put this on record.

Proper Customer Service

One important aspect of ensuring good chargeback protection is to set up a stellar customer service. That way, you will have people who can respond to such issues in a timely manner and determine the authenticity of a chargeback. For those customers who may want to request a chargeback due to product quality or customer service, a good customer service can come in handy. It is up to the business to make the customers feel secure and valued when shopping online.

In short, ensuring a good chargeback protection requires a multifaceted approach that takes into account both the company’s and customer’s interests. Anything important to prove that a transaction was authorized must be documented and presented in the event of a dispute. At the same time, ensuring proper service to all customers is essential.

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