When customers dispute bank charges, merchants are forced to fight to keep the money they’ve already earned. For business owners, the problem is only getting worse: chargeback expenses increased 8% last year for all US merchants.
Since most chargebacks are settled in favor of the customer, we’ve put together a short list of things you can do to help prevent chargebacks in the first place.
If your contact information or return policies are hard to find, customers might go straight to their banks to challenge the charge. Don’t make your customers jump through hoops to make complaints or return merchandise.
Customers are more likely to dispute a charge when they don’t recognize the business name on their credit card statement. Check with your processor to make sure you’re registered under a name your customers will remember.
No one wants to be charged for accidentally hitting “submit” twice. Make sure your website or point-of-sale system is set up to track and prevent duplicate orders.
If you’re accepting online payments, use CAPTCHA to curb fraudulent transaction bots. This can often be enabled from your gateway settings.
Enable auto-settlement on your gateway or point-of-sale system, or make sure to manually settle your batches on time. If you have pending transactions that are charged to the customer too long after the product or service is rendered, this could potentially result in a chargeback.
Merchants with excellent customer service and the willingness to "right any wrongs" done typically see little to no chargebacks.