Prevent Chargebacks in your High Risk Business

I am sure most of you reading this already know the impact that chargebacks have on your business. Yes the loss of money is a pain in the ass, but finding yourself unable to keep a merchant account is a bigger issue. While everyone needs to be concerned about reducing chargeback ratios, high risk verticals need to be especially vigilant. Here are 7 ways high risk merchants can prevent chargebacks and protect their business.

1. Ensure Customers Know Exactly What They’re Buying

Seems like a no brainer right? Yet one of the most common reason codes of chargebacks is a customer receiving a product or service that is different from what was described on the merchant’s website.?

Be sure to include the following on your product page in order to minimize confusion in the future:

• Complete product descriptions that detail dimensions, colors, materials, quantities, and any defects.
• Pictures from multiple angles
• Videos of the product in use
• Customer service contact information, making sure to answer all questions promptly and completely to ensure customers get what they want and expect.

2. Notify Customers About Recurring Billing Charges

The best piece of advice I can give on this subject comes down to if there is a free trial component to your subscription based service. If that is the case for you, I highly recommend that you DO NOT require a customer to enter their credit card information to start the free trial.

I understand that we live in a day where peoples attention are like squirrels and the fact is that it is easy for a customer to forget they signed up for your service. Which is why in the back of your mind you have been requiring card information on the free trial in fear of the lost opportunity of a sale.?

SO if you still fall in the camp of collecting credit card information upfront on a free trial, or if your packages are all subscription based you must ensure that you’re reminding customers every time a recurring bill comes up well before the subscription renews. This will allow for proper planning on the customers part to get prepared for the expense and prevent any surprises when they get their credit card statement at the end of the month. P.S. this will also protect you if the customer files a chargeback saying they didn’t know about the charge.

In addition you can also prevent chargebacks by clearly stating cancellation and billing policies on websites and in all customer communications. And if a customer does cancel, e-commerce retailers should process that cancellation in a timely manner.

3. Provide Realistic, Accurate Delivery Estimates

With every conversation we have with our ecommerce clients this is a point we will always address head on during the application process. Not only are we going to describe these estimates in our application to allow the banks to know more about this aspect of the business, we are also going to have a dedicated tab on the website where all this information is placed in order for the customer to have their expectations met upfront.

In the day of Amazon customers want to know how long it will take for their order to arrive. And if that order takes too long to ship or isn’t delivered in the time frame promised, merchants run the risk of the customer filing a chargeback.?

So with the addition of this upfront communication also ensures you are letting the customer know what method is used for delivery and that you have provided them with a tracking number to follow up on the purchase.?

4. Give Extra Care to Custom Orders

Regardless of what it is you sell, customers have a high expectation when they purchase something. When they add any custom work to a product, or if they are buying more into a service for 1-on-1 coaching, customers are even more invested in the final outcome.

To avoid unhappy customers and reduce the risk of chargebacks, merchants should do their best to show exactly what the finished product will look like and then doing their best to make good on that promise.?

A common best practice for merchants offering custom orders is to add a product video to the product description page. This will improve expectations around what is being provided to the consumer.

5. Make Billing Descriptors Recognizable

I see this mistake far too often. First of all a billing descriptor is a short description on a credit card statement that describes the merchant from whom the customer made a purchase. When the said customer does not recognize the billing descriptor found on their credit card statement a chargeback will be initiated.

To avoid these kinds of chargebacks, make sure the descriptor used is the same name that appears on the website customers are purchasing from. The biggest issue we find is that merchants use their corporation name as the descriptor, yet their DBA is different. This causes much confusion with the customer. The descriptor? could also be a brief description of what was purchased of even the website url to get rid of any confusion.

6. Provide Exceptional Customer Service

Nothing more to say about this, just do it.? Care.? Simply just care.

7. Implement a Robust Fraud Prevention Solution

To prevent chargebacks from happening in the first place, business owners should consider implementing a robust fraud protection solution that can detect the subtle nuances of fraud and stop fraudulent transactions from ever processing. Today’s advanced solutions, combining artificial intelligence and highly trained analysts, can make a big difference with reducing risk exposure.

If you would like to learn a little more about how we are helping business owners implement these smart strategies and increase their revenues click here to speak with us .