Chargebacks and retrievals can seem expensive and complicated for any business, but they do not have to be. Depending on how your business manages, processes and accepts payments, avoiding costly chargeback mistakes is possible. To start, some chargebacks are unavoidable, but many chargebacks can be avoided, as can the costly expense of managing this fast growing problem that impacts the entire payments ecosystem.
Tips for Managing Transactions to Avoid Chargebacks
Avoid Chargebacks For Online Orders:
- Authorise all transactions: Use Internet Authentication provided by Visa, MasterCard and Maestro Cards in order to validate the cardholder’s identity.
- Data: Have as much data about the customer as possible before the purchase is made.
- Flag issues: Ensure your system can flag card issues (invalid, over limit, expiry dates).
- Modulus 10: Include a Modulus 10 check Digit Algorithm into the online payment page.
- Monitor patterns: Monitor buying patterns from customers and be able to flag suspicious purchase/purchase patterns.
- Checks and balances: Have a checks and balances system for international orders: Ensure you are aware of the various regulations by country.
- Ensure delivery is done through a reputable partner that does not work with a third-party delivery system.
Avoid Chargebacks For Point of Sale Orders:
- For cards used at PDQ terminals, ensure the card number on the printed voucher matches the card number.
- Check the first four digits of the card (Visa/MasterCard) to ensure they appear in the proper location.
- Check validity of card and expiry dates.
- For cards that do not work at the terminal, create a manual imprint of the card details to show it was present at the time of the sale.
- When obtaining a signature, ensure it matches the cardholder’s ID signature.
- For transactions over your floor limit, seek authorisation.
- Never tell a customer your floor limit.
Avoid Chargebacks For Phone Orders:
- Have customer repeat their card number and verify that number with the customer.
- Use a reliable carrier to deliver goods; ensure carrier obtains a signature upon delivery.
- Ensure the delivery system does not rely on a third-party person to bring item to the cardholder.
- Record card details: Name, card number, expiry date, 3 digit CVV code, name, address.
Avoid Chargebacks For Mail Orders:
- Confirm order details with the customer, including card number, expiry date and all other details possible to avoid a future chargeback.
- Take control of how the goods are going to be delivered: Use a carrier that obtains a signature upon delivery.
- Ensure your delivery system does not rely on third-party service to bring item to the cardholder.
- For customers who cancel the original transaction and then re-order the goods, process as a new transaction.
- Ensure order forms are filled out and are filled out with cardholder’s signature, card number and all card details.