Chargeback is a rather unpleasant moment in the relationship between the online store and the buyer. Whatever the customer’s reasons for wanting to make a chargeback, the very fact of a chargeback can damage both the seller’s reputation and his pocket.
The seller gets a chargeback when the buyer asks his bank to cancel the payment. And for the store, this results in financial losses, lower ratings, and even a tarnished image. After all, a dissatisfied customer can write a negative review, or otherwise spread unwanted information about the store.
All costs of the chargeback are also borne by the merchant. In addition, the transaction fee paid for the transaction is not refunded to the store.
VISA and MasterCard payment systems have limits on the number of chargebacks. If the store exceeds the set limit, it is subjected to a serious inspection by the payment system or bank. The result of such checks, as a rule, is an increase in the amount of penalty for each chargeback, or even the closure of the store’s account. There have also been situations where the bank has deprived the merchant of the ability to accept cards for payment.
Naturally, online retailers and service providers want to minimize the number of chargebacks. While it is impossible to guarantee 100% protection against chargebacks, it is possible to try to minimize them.
Scammers?
A significant portion of chargebacks was due to fraud attempts by unscrupulous customers. Fraudsters acted in the following way: having used someone else’s card data for payment, after receiving the goods they asked for a refund because the transaction had been made without their knowledge.
The emergence of security technologies (3D Secure, Verified by VISA, MasterCard SecureCode) has significantly reduced the number of such situations. Technologies make it possible to make sure that the cardholder and no one else makes the payment. The buyer must either enter a one-time code or log in to the online bank to be authenticated.
But it’s not uncommon for a buyer to want his money back. For example, if the goods turned out to be of poor quality, or don’t match the description. And the owner of an online store should know how to avoid chargebacks in such situations.
The customer is always right
Customer loyalty is the key to business prosperity. This means that one simple rule must be strictly adhered to: always fulfill your obligations to the customer.
No one is immune from emergencies. But in such situations, you can behave in different ways. For example, if the seller for one reason or another can not organize the delivery of the purchased goods in the stipulated time, you just need to inform the client about it. Call, apologize, explain the situation, and set a new, realistic deadline. This is not difficult to do. Otherwise, the client may demand a chargeback on the second or third day of the delay.
If the seller realized that he could not deliver the goods at all, where it is better to immediately contact the buyer and offer a refund. Not forgetting, of course, to apologize and explain the reason. It would not be out of place to offer the customer a discount on the next purchase as compensation. And even if the buyer is not completely satisfied, he will not demand a chargeback through the bank or write negative reviews.
It’s important not to leave the customer in the dark, but to provide reliable and clear feedback. If your customers see that they are dealing with a polite, knowledgeable salesperson who is willing to help, they are unlikely to deliberately want to give you trouble in the form of chargebacks and negative feedback.
“Terms and Conditions.”
In the “Terms and Conditions” section of the online store’s site, write the terms of replacement and refund in detail and clearly. The list of conditions shouldn’t be long and confusing. The buyer should see in which situations and how he will be able to return the purchase and get his money back. Specify the return period and other rules. Buyers understand that it’s long and complicated to return a payment through a bank, a chargeback, but resolving issues directly with the seller is much easier and quicker.
It wouldn’t be a bad idea to ensure against unfounded claims from the client in the case of a chargeback. For example, have a document confirming that the buyer received the goods on time, in good condition, and fully compliant with the description. The courier who delivered the goods must take a receipt from the buyer.
These simple guidelines will help you avoid many of the hassles associated with the chargeback procedure.