Avoid Chargebacks with These 10 Helpful Tips

To avoid these chargebacks, focus on providing the customer with a high-quality experience.

• Don’t sell counterfeit products. Make sure your merchandise is genuine. 
• Survey your customers. Ask about perceived value and quality. Then, remove any subpar items from your inventory. 
• Write detailed, easy-to-understand product and service descriptions. Include several images taken from different angles. Use a zoom feature or highlight noteworthy characteristics. Mention features like material, color, size, weight, duration, file type, etc.
• Share customer reviews. Peer feedback can inspire confidence and set the right tone.  

To avoid these chargebacks, you need a team of well-educated employees, fraud detection tools, and modern payment processing technology.

• Become familiar with the most common characteristics of high-risk orders. There are 30 fraud red flags to watch out for during internet, telephone, and in-person transactions.
• Consider a fraud detection service. There are several vendors that aim to detect and stop potentially fraudulent orders.
• Add identity verification tools to the checkout process. Address verification service (AVS), card verification values (CVV), and 3D Secure 2.0 can help ensure the shopper is the actual cardholder.
• Only use EMV-compliant terminals. If applicable, upgrade to a PIN-preferring POS for the highest level of protection.
• Use fallback options — like manually entering transaction data — as a last resort. If you do perform a key-entered transaction, make an imprint of the card.

To avoid these chargebacks, you need a well-trained fulfillment team that adheres to policies designed to reduce potential problems.

• Educate your fulfillment team. Make sure team members are familiar with your merchandise and know what to ship.
• Use adequate supplies. Package merchandise in the correctly sized box and use sufficient packing materials so items won’t break in transit.
• Adhere to timelines. Give accurate estimates for delivery so customers know when to expect purchased items.
• Monitor inventory. Ensure your fulfillment department has a way to report low inventory. You don’t want to find out after an order has been placed that you can’t fulfill it.
• Check digital products. Confirm that the correct items are being delivered. Make sure the actual file type and size match what you’ve promised. Look for downloading errors or other technical glitches.
• Follow through with services. If you’ve promised to perform a service, do it! And do it the way you’ve said you would — don’t cut corners, show up late, or cheapen the experience.

However, most of those reason codes have been retired. Now, when customers are uncertain about a transaction, the dispute is simply classified as fraud. 

To avoid chargebacks caused by confusion, write easy-to-recognize billing descriptors that help the customer understand exactly what was purchased.

• Use the “doing business as” name that customers are familiar with in the descriptor. Make sure your processor hasn’t used your legal business name by default.
• Try abbreviations. Descriptors are usually between 20 and 25 characters. If your descriptor is too long, use abbreviations so more of your message is conveyed.
• Add your phone number. If customers have questions, they can call you instead of the bank.
• Check for variations. Your billing descriptor might vary by card type (credit, debit) and brand (Visa, Mastercard). Run a few test purchases to see how it displays. Make sure it is easy to understand in all circumstances.

To avoid these chargebacks, create policies and practices that are focused on enhancing the customer experience.

• Write clear policies that are easy to find. Outline what is expected of the customer and what you’ll offer in return. Share your policy several times throughout the buying journey: on the sales page, the checkout page, and the order confirmation email.
• Extend the time limit for refunds and returns. It might take awhile for customers to form opinions about their purchases. If your refund deadline has passed but the chargeback time limit hasn’t expired, a dispute will seem like an appealing option.
• Consider offering free return shipping. If you make the shopper pay for shipping but there are no costs associated with a chargeback — and the customer gets to keep the merchandise — a chargeback looks like a pretty sweet deal.
• Add customer reviews to your policy page. Ask satisfied customers to explain how easy your return process is and how helpful your customer service team is. Other shoppers may be enticed to give it a try instead of a chargeback.

To avoid these chargebacks, quickly and accurately resolve customer complaints with top-notch customer service.

• Fulfill valid refund and cancellation requests. If a refund or cancellation request adheres to your policy, make sure your team follows through on what’s been promised.
• Send an email after the refund or cancellation has been issued. Let your customers know you’ve acted upon their requests and estimate when they can expect to see the money returned to their account.
• Notify customers before you process recurring transactions. Remind customers of upcoming charges, especially if a significant amount of time passes between each recurring billing cycle.
• Answer the phone within a few rings and limit wait times. Generally, an increase in customer frustration is proportional to the length of time spent waiting for attention.
• Respond to emails with personalized solutions. An autoresponder can be used to acknowledge a customer complaint, but it usually needs to be followed by a personalized message that addresses the customer’s unique situation.
• Be active on social media. You might use social media for marketing, but your customers use it for communication. Be prepared to field conversations on your various social platforms, just like you would with any other communication channel.