4 tips for merchants how to prevent chargebacks

Posted on 23.1.2017
Written by Eva Ciga

Chargeback is a term that is well-known to modern merchants. For most of them, this term doesn’t bring positive feelings! So, what do chargebacks really represent?

Businesses accepting credit card payments are aware that credit card transactions can be disputed by the cardholder. In cases like this, their business’ bank will simply notify them of the chargeback request and eventually charge a chargeback fee. There is no doubt that these bills can be quite costly. Online, mail and phone merchants (card-not-present) are the most affected categories of merchants. The good news is that there is a way to prevent chargebacks.

Tips for merchants on how to avoid credit card chargebacks

Refund policy

First of all, you should have a clear refund policy. In cases of ordinary brick and mortar stores, unsatisfied customers often are given the option to get refunded. There is no reason why you should not apply the same practice if you are running an online store. Make these refunds as quick as possible if you want to avoid chargebacks.

Avoiding duplicate transactions

How to avoid chargebacks is a common question these days. There is actually more than one good solution to do this. The next option is to prevent duplicate transactions, which is also another common reason for chargebacks. The majority of online stores set clear warnings on the checkout page, which states that the ‘Buy’ button should never be clicked twice because they will be charged twice. According to many experts, this may cause confusion to some buyers. The more discreet and effective option is to adjust the checkout page  code and disable the checkout button once it is clicked. You can also make the page process only the first transaction and prevent processing any further transactions that were made after a very short period of time (within seconds).

Conducting a follow-up

Furthermore, you can also perform a follow-up once the transaction is completed. The best way to do this is to send an automated email thanking your customer for the purchase and asking them for feedback.

Adding a phone number to the transaction statement

Finally, you can also ask your bank to include your customer care phone number in your descriptor. So, when a customer has a complaint or inquiry, the phone number provided on the descriptor could prevent a potential chargeback. Keep in mind that these are only some of the many tips for merchants to avoid credit card chargebacks.



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