Credit card chargeback prevention tips

For merchants, chargebacks are a part of doing business when you accept credit cards. It can be costly, time-consuming, and stressful to sort through legitimate and illegitimate (fraudulent) charges. But there are steps that can be taken to prevent them in the first place. Chargebacks911 provides a list of effective  prevention tips that can help merchants run offense instead of defense:

1. Reduce Merchant Error

Follow business best practices to reduce merchant error. Reference payment networks’ rules and regulations and obtain unbiased analytics on your business.

2. Use All the Available Tools

Be sure to use validation tools such as Address Verification Service (AVS), card security codes (CVV2, CVC2, etc.) and 3D Secure to help deter chargebacks.

3. Improve Your Customer Service

Be sure to respond to customers and prospects by answering the phones quickly, replying to emails and chat requests, and tracking social media messages in a timely manner.

4. Manage Recurring Payments

Clarify terms of service and rate changes, make cancellations easy, and fulfill requests promptly.

5. Mitigate Potential Shipping Issues

Before a sale, be sure to educate customers on potential shipping delays, back orders, and discontinued items. Track items and keep customers informed of where their delivery is located.

6. Be Honest in Your Marketing Tactics

Provide accurate product information with detailed descriptions, clear pictures, and answer customer questions quickly.

7. Learn How to Spot Fraud

Educate yourself and your employees on the red flags that could signal fraud. Validate suspicious orders and make sure your customers are aware.

8. Prioritize Customer Data Security

Protect your customers’ personal data by maintaining a high-level of security compliance and consider offering EMV, tokenization, and/or end-to-end encryption.

9. Protect Your Business from Friendly Fraud

Friendly fraud is when a customer files a chargeback instead of trying to first obtain a refund from a merchant. Track shipments, clarify your billing descriptors, and monitor any suspicious activity to avoid this type of activity.

Need help?

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