Are You Doing What You Can to Prevent Chargebacks?
Chargebacks remain at the forefront of ecommerce fraud. Consumers make frequent claims that they didn’t authorize a purchase online, often resulting in a costly process whether you choose to contest it or not. As we noted recently, this is often a deliberate action on the part of the customer – a concept known as friendly fraud – who may feel stilted over a purchase yet see recourse as too hard to achieve. The best way to minimize chargebacks is to prevent them in the first place. Fraud prevention software can help with this, as can various basic principles that ensure customers don’t get put off from buying something at your store.
Keeping the customer happy
The essential cornerstone in minimizing chargebacks is a good customer service experience. By mitigating the pain points that may cause consumers to call their banks to file a dispute, they’ll feel more welcome in the store and come back to shop. Multichannel Merchant noted there are many ways of getting the customer on your side, the first being an easy return policy. Returning products is a lot harder to do with ecommerce sites than with physical stores. You should make the process as clear and simple as possible, even if it means taking a loss by sending packaging for the return.
“Prices should be as transparent as possible, with no hidden fees.”
Cutting down on chargebacks can also occur during the purchasing process. Prices should be as transparent as possible during check-out, with no sudden fees or add-on charges appearing just before the final page reviewing the order. In addition, delivery should be consistent, if not fast. Customers will get annoyed at delayed arrivals, though they may tolerate a slow delivery date if they can expect to get it at the stated time.
Fighting against chargebacks
Even with the best prevention measures, however, people will still file chargebacks. It is in your best interest to dispute the claims, as it will give the banks reason to tighten up their chargeback measures. There are three chargeback claim types, according to Practical Ecommerce: 1) Accusations of fraud, 2) Not receiving the item, and 3) Receiving the wrong product . For the fraud accusations, the best solution is to have fraud prevention software in place that can monitor and record activity, such as IP address, location and date of purchase. Armed with this information, you can dispute a claim more effectively against a customer. Preventative measures such as double-checking addresses with high-value orders, performing extra procedures for international orders and contacting buyers ahead of time are particularly useful.
In case someone doesn’t receive his or her order, you should fall back on your written shipping procedures. Having order tracking and shipping notifications can help develop a paper trail that will not only get to the bottom of what happened, but will also successfully dispute a claim. If a customer says he or she got the wrong product, that will be harder to challenge. Make use of video and still images to confirm what items were shipped out with a particular order.
While chargebacks are costly and painful, they can be prevented by maintaining good customer service, ensuring pricing transparency at checkout, establishing consistent delivery expectations and employing fraud prevention software based on machine learning that can detect fraudulent activity before they occur. By being active in disputes, you’ll minimize chargebacks and their impact.
Other Related Resources You May Like:
Latest posts by Ken Bui (see all)
- EU Fifth AML Directive: How Banks Can Prepare for Five Key Changes - November 18, 2019
- AI Best Practices to Improve Enterprise Risk Outcomes - October 22, 2019
- Why It’s So Hard for Challenger Banks to Fight Financial Crime - September 24, 2019
Subscribe to stay infomed