How to Reduce Your Number of Charge Backs

Charge backs are when credit card companies take money paid to you and give it back to the customer. This causes you to lose the shipped merchandise as well as the revenue from the order. It can cause you to have additional fees charged, higher rates of future orders, and also lose your ability to process credit cards and even your merchant account.

There are two types of groups that cause charge backs. These are dissatisfied customers and people who commit fraud. If a customer buys an item and uses cask or a check then later realizes that it is defective or disappointing ht only thing he can do is consult the merchant. It's possible to lose your money if the merchant disagrees or is just difficult. Credit cards on the other hand will offer not just convenience but protection as well as in the form of charge backs.

A charge back can be requested if a customer was charged twice for an order, a bank error and also if an order was returned with no refund processed. In preventing chargebacks, allow customers easy access I contacting you. Be sure that your email and phone number is in an easy to read location on your website as well as the packing slip that you include with your orders. Keep in touch with your customer throughout the buying process. Let them know when you've received the order, when it's shipped, or if there's a delay in shipping.

When orders are placed, don't charge until the order has been shipped. It you wait too late to charge the item it may cause confusion to the customer as well as raise your discount rate on the transaction. It can also reduce your ability to collect your money. You should also be very clear about your services and products. Make sure that you do not mislead your potential customers in a marketing g campaigns. Be sure that all information is clear and precise. Make available all store policies and return policies to the consumers. Allow customers to check boxes that state that they understand policies and procedures of your store before checking out on websites.

Watch out for customers who make orders on stolen cards. There is an AVS, Address Verification System that will validate the billing address associated with their credit card. CSC, Card Security Codes are also used as verification in the United States. Some customers falsely claim that their items were not delivered. Always ship items in ways that require signatures from the recipient or someone at the address. Merchants are now fighting back against bad customers by using BadCustomer.com which offers a way for merchants to control their charge backs. It is a free service to merchants that can be used to upload information gathered about certain customers who tend to have many charge backs. This may even block transactions from occurring on websites. If a customer is put on the list and wants to be removed it will cost them $100.

source: Petracco, Susan. Defeating Chargebsacks. November 2009.
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