BEST WAY TO AVOID AND REDUCE CHARGEBACKS
WHAT IS A CHARGEBACK?
A chargeback is a form of customer protection provided to the customers by the banks, which arises out of disputes between credit card owners and merchants. This protection provides the authority to the customer to file complaints regarding fraud transactions from their account. If the bank that issued the card accepts the dispute, it will refund the charge to the customer and after that the bank will file the chargeback complaint and send the refund notification to the respective merchant. If you do not prove your transaction to be legitimate, the bank will take back the refund with an additional amount. Sometimes there are invalid reasons for chargebacks which needs to be prevented and reduced. There are some easily applicable chargeback reductions techniques which are given below.
As a merchant, you must know all about the reasons behind the chargebacks. The general cause of chargeback is the fraudulent transaction. When the credit card is processed without any authorization of the credit card owner, it leads to the chargebacks on merchants.
BEST WAYS TO MANAGE CHARGEBACK
Customer refunds: If a customer asks for a refund and the claim is valid then you must refund as soon as possible to avoid the chargeback.
Preventative controls to avoid fraudulent charges: Online transaction consists of the higher fraud risk. Some methods to reduce these risks are given below,
- You must require the security code on the back of the card to process the transaction.
- You must keep the record of the customers who create the problems and block their transaction.
- You must limit the number of transaction from the same customer for a particular time period.
- Record customer IP address.
- Make the use of address verification service.
Customer service: Make your contact information easily visible to the customers. If the customers cannot find the contact information of your company, then they will directly go to the bank to file a chargeback.
Recurrent transactions: This service is always used for subscription plans ad causes an automatic transaction from the customer's account. You must stop this automatic payment service to prevent the multiple chargebacks from a single customer.