Getting a merchant account for your business is a very promising idea — you are adding practicality, conveniency and a professional image to your product or brand. However, payment card processing might be very confusing and requires the good knowledge of many different aspects, one of which is chargebacks.
Chargebacks allow cardholders to file a complaint concerning a fraudulent transaction. Upon receiving the complaint, the card issuing bank gets into investigation and once the transaction is proved to be fraudulent, bank refunds full amount to the client. What is important to know from the merchant point of view is that if a seller cannot prove the transaction to be legitimate, the bank will take the entire value from their account. Also, having too many chargebacks can seriously damage merchant’s business and its image. Do not think that some fraudulent transactions may go unnoticed — banks take it very seriously because they are at advantage, in this case.
No need to explain further — chargebacks are better to be avoided. Reasons for those may be different: not processed card, not received item or technical issues. To reduce the possibility of a chargeback dispute, these things have to be thought through and maintained.
- Create a great customer service experience, it may set client to channel their problem to you first, before getting it further to request a chargeback from bank.
- It is important to verify customer’s card details, along with their billing address, card issuing bank and security code. Check transactions with different registered and billing addresses more carefully. This will also help to prevent unwanted chargebacks.
- Make your policies clear to clients and make sure they understand them before making transactions.
- Set up filters for your payments system. It may include accepting transactions through different security checks depending on particular features. For example, Crassula’s white label for eCommerce offers a set of filters that clients can organise depending on IP address, country code, card bin, email or domain with the possibility to apply a 3d secure check. Using a white label solution is a very convenient and easy way to turn yourself around technical security obligations to avoid frauds and just focus on product.
Note, that following every security tip does not give a 100% guarantee that your business will not catch any frauds. But understanding of how you control fraud and chargeback prevention will enable you make insightful operational decisions. This will show you as an honest business that deserves its revenue.
If you want to avoid the burden of chargeback control, get to know Crassula’s eCommerce white label product.
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