The famously pugnacious British prime minister Winston Churchill once said, “He who fails to plan is planning to fail.” It’s a great soundbite––and it’s also sound business advice. If you’re serious about avoiding chargebacks, you need a plan.
But what kind of plan?
Let’s look at seven best practices for successful chargeback protection and management.
1. Improve the process
Gather information. Timely, accurate information is essential for building a case when representing chargebacks. Have you got a system in place to ensure you get it?
Simplify workflow and get rid of human error. You need to reduce the time and resources needed to process a chargeback. Automation allows merchants to stay on top of credit card processing rules and make the dispute process simpler.
Set up internal fraud monitoring. This should include monitoring IP addresses or high value transactions to prevent fraudulent chargebacks before they occur.Learn quickly when a customer is disputing a charge. Notifications allow you to address chargebacks proactively without tightening up fraud control so much that you turn away good customers.
2. Improve customer service
Make it easier for customers to contact your company and speak to a real person. Consider extending hours of operation to reduce hold times and automated menu options. You don’t want customers to get frustrated, hang up, and choose to call their issuing bank instead.
Learn which chargebacks to dispute and represent. Whatever you do to prevent chargebacks, they will still happen, so you need to choose the ones that are most worthy of being fought and represented. Consider the return on time and money spent and pick your battles carefully.
4. Control your data
Collecting information from chargebacks allows the savvy merchant to adjust business practices if necessary and identify internal issues. Monitor your chargebacks and determine where you should take preventive measures. Some chargebacks occur because customers don’t recognise charges they receive. Including a URL or contact number in the descriptor field for credit card billing statements makes it easier for customers to recognise purchases made with their credit cards. In turn, this reduces the chance of mistaken chargebacks by customers who think they’ve been incorrectly charged.
5. Identifiable Billing Descriptors
Some chargebacks occur because customers don’t recognise charges they receive. Including a URL or contact number in the descriptor field for credit card billing statements makes it easier for customers to recognise purchases made with their credit cards. In turn, this reduces the chance of mistaken chargebacks by customers who think they’ve been incorrectly charged.
6. Fix problems in operations
Excessive chargebacks may indicate problems in operations. Whether it’s a quality control issue with merchandise, ineffective or misleading product marketing, or another root cause, identifying and addressing these issues can significantly reduce the occurrence of chargebacks.
7. Outsource to the experts
Tasking a third party with all or some chargebacks allows the business to free up resources that can be better spent on running a successful enterprise. To be effective, it takes deep expertise and requires you to keep up on all the latest rules for chargebacks. Many merchants find the best solution is to outsource the task to a third party that’s 100% focused on chargeback prevention and management.Resolving chargeback disputes takes time. That’s time that could be better spent making sales and supporting customers. So why not start planning for a future where you can stop wasting time and focus on what matters most for your business? Winston would approve.
Learning More About Chargebacks
Chargebacks can be complex. There is much more that you should know about them. To help you continue learning about chargebacks, take a look at the following resources. These explainers will help cut through the complicated talk and clear things up.