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How to Deal With Chargebacks?

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Chargebacks are common problems associated with electronic cash transfers. With the continually increasing number of online transactions and better consumer awareness, it was necessary to put things under control. This is where the chargeback mechanism was implemented, primarily for customer protection.

Therefore, businesses that accept online payments encounter these issues on a daily basis. However, there are times when payment holds are initiated by the consumer, the commonly called friendly fraud. Fortunately, below are some measures that you can take to minimize the risk of getting them.

1. Install Processor Protocols

Chargebacks are better controlled in an orderly manner rather than acting irrationally when you receive one. Fortunately, every e-commerce firm has its own protocol when it comes to accepting electronic payments. As such, card purchases can be managed by installing software that checks the expiry dates.

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For online payments, on the other hand, your processor can be equipped with software that requests for permission to process transactions. Introducing chargeback counter mechanisms into your business is therefore inevitable.

2. Use Clear Payment Descriptors

The majority of chargeback disputes have something to do with unclear payment configurations. These include false merchant names, unclear identification details on the customer’s side or credit card thefts.

If for instance, your merchant name is different from the recipient account details, a customer may deem it fraudulent and hold the payments or request for a reversal.

The best solution to this, therefore, is to ensure your descriptor reflects what the consumer already knows.

3. Deal With Customer Service Issues Promptly

Your payment processor can be configured to relay chargeback notifications promptly should a customer dispute a charge after the transaction. In other cases, a client can call their online payment companies to query a purchase if they do not receive feedback for a complaint they filed.

To avoid such problems, therefore, you should answer all phone messages, emails, and letters as soon as you receive them. This is the best way to address chargeback complaints promptly. Besides, it might save you some unnecessary hassles down the road.

4. Learn to Spot Warning Signs of Fraud

Sometimes shoppers are ignorant when they instigate a chargeback. For example, at times when a stolen credit card has been used to make purchases. Installing a chargeback protocol to monitor suspicious transactions is therefore necessary. This counter mechanism should also be able to note suspicious details, incorrect credit card security codes or even non-matching billing and shipping addresses.

That way, you will be sure that a customer is legitimate.

5. Keep Good Records

Finally, keeping accurate customer records, transaction dates, authorization information, and amounts, is paramount. In case you have to instigate a chargeback recovery, some incorrect details can undoubtedly send you to the losing end. Keeping signed receipts or contracts, therefore, can be ideal. Otherwise, there won’t be much that you can do if you will be the victim of a fraudulent purchase.

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The truth is, chargebacks will occur from time to time, so long as you accept any form of wire money transfer. At the same time, an unsatisfied client can request for a payment hold or transfer reversal, mainly if they bought an item online that they didn’t like. It could also be due to temporal account freezing on suspicion of illegal transactions. With the above measures, however, you will have significantly curbed these problems.

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