• Tips for Merchants to Avoid Credit Card Chargebacks

    Chargebacks are a costly and unfortunate fact of life for many small businesses that accept credit cards. However, there are ways you can protect yourself against unfair chargebacks.

    Credit card chargebacks happen when customers contact their credit card issuers to dispute charges. If an issuer deems a dispute valid, your merchant account is debited for a credit card charge that had previously cleared — and you’re out the money, plus a chargeback fee from the processor that may range from $15 to $100.

    Disputes may be considered valid for a number of reasons. In some cases, the purchase was made fraudulently by a third party, using the customer’s identity. Customers also may dispute charges if they:

    Didn’t receive an item they ordered
    Feel that a product or service was substandard
    Were incorrectly billed
    Don’t recognize the charge on their credit card statement

    So let’s get to the helpful tips

    1. Follow processor protocol. Every credit card processor has its own protocol when it comes to accepting credit cards. Make sure you follow the processors instructions in the letter or email to guide you through this process.

    2. Use a clear payment descriptor.  The majority of disputes our firm handles have to do with unclear payment descriptors. Your payment descriptor is the merchant name and that appear on the customer’s credit card statement when they make a purchase from you. The solution is to be sure your descriptor reflects what the consumer will recognize.

    3. Get it in writing. Require customers to sign a contract that spells out the specific services your company will provide. This will help keep both parties on the same page. The key is to get the customer’s authorization in writing.

    4. Deal with customer service issues promptly. Your credit card processor will likely offer chargeback notifications so you can find out quickly if a customer is disputing a charge. It’s a good idea to take advantage of those notifications so you can address chargebacks promptly.

    5. Keep good records. We recommend that at a minimum, you keep accurate records of customers’ credit card transaction dates, amounts and authorization information, in case you need them to fight a chargeback.

    6. Fight back when it makes sense. Each chargeback could cost you an additional fee. Plus, if you have a history of chargebacks, it could possibly hurt your relationship with your merchant account provider.

    7. Deal with customer service issues promptly. Your credit card processor will likely offer chargeback notifications so you can find out quickly if a customer is disputing a charge. It’s a good idea to take advantage of those notifications so you can address chargebacks promptly.

    8. Keep good records. We recommend that at a minimum, you keep accurate records of customers’ credit card transaction dates, amounts and authorization information, in case you need them to fight a chargeback.

    9. Fight back when it makes sense. Each chargeback could cost you an additional fee. Plus, if you have a history of chargebacks, it could possibly hurt your relationship with your merchant account provider.

    Click here to learn more about ECI and whether our point of sale systems may be right for you.

    01.03.2017 by admin 0 Comment(s)