Preventing and Disputing Chargebacks

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If you own a small business, chances are you have probably heard of chargebacks. Chargebacks happen when a customer calls their credit card issuing bank to dispute a charge on their billing statement. The issuing bank then contacts your acquiring bank, which contacts you. Having too many chargebacks hurts your credit card processing history and could also lead to the termination of your merchant account. However, Instabill offers these useful tips on how to prevent and dispute chargebacks.

How You Can Avoid Chargebacks

There are many reasons why customers may request chargebacks, however, the main causes are confusion and miscommunication. A customer may not recognize an item description on their billing statement, or they may have no way of knowing if a merchant has shipped their order. No matter the cause, there are easy steps merchants can take to avoid any miscommunication and possible chargebacks:

  • Optimize your billing descriptor. By providing your company name and information on your descriptor, customers are more likely to recognize the purchase they made.

  • Always provide a receipt. Whether it is printed, emailed, or handwritten, give your customers a receipt of their purchases, and keep a copy for your records.

  • Make sure your company’s contact details are readily available on receipts, business cards, and your website.

  • Display your refund policy. If a customer knows you have a return or refund policy, they will be more likely to contact you directly with their dispute rather than their issuing bank.

  • If you are shipping a product, always send confirmation emails and keep records of them.

Be Aware of Fraud

Although chargebacks can happen due to simple confusion, there are some who will use the chargeback process to commit fraud. One popular example is a customer claiming that they never got their product shipped to them. Below are some easy ways you can insure that you will not experience fraud through the chargeback process:

  • If a customer places an order with you, require a signature upon delivery of your product. You can use this as proof that the customer received your product in the event of a chargeback.

  • Keep records of any emails sent between you and your customer. You can also use these documents as proof when disputing a chargeback.