Сhargebacks: how to deal with them?
Chargebacks are a real problem for any firm. Many companies see no other option than to record such payments as losses. They see themselves as powerless to change anything, but in fact, it is in the hands of companies that hold the main keys to the door behind which lies a world without a huge number of chargebacks, where companies successfully meet their profit targets.
Ready to open those doors learn how you can influence chargebacks before they cause your firm to collapse?
Understand the scammers you’re dealing with
Remember that any transaction that goes through your site could potentially be fraudulent. Fraudulent transactions are much easier to prevent than to later fight them once they have been committed. We recommend that you use tools to detect fraudulent transactions in advance.
If a fraudulent transaction has been committed, analyze how the customer has ordered items before, how much and how different it is from the amount he ordered the item for now. He may have ordered one item at a time before, but now they have put 10-15 items in the cart. Very often cheaters buy goods that are very easy to resell later. In addition, scammers very often order from different accounts, but from one IP, or different orders paid by one card.
Before you start selling on your site, register for a fraud detection service. Do not give up on tools that increase the security of transactions and are provided by your payment processor. 3D Secure, CVC2 and address verification will also help detect fraud.
Never ignore warning signs
It will be much easier to refund the customer for the item, but not lose the item itself, than to struggle with chargebacks. In addition, they will take much less time to process than you will to process chargebacks, and waste employee time on completely the wrong things.
By analyzing the warning signs, you will greatly reduce the number of chargebacks with minimal loss to yourself.
Never forget about hidden problems
Analyze your chargeback transaction data and try to find hidden problems. After all, the reasons your customers initiate chargebacks are often not as obvious as they seem. If you have one chargeback after another, and you still can’t identify the natural problem, it’s not going to make a difference. For example, if you do your analysis and realize that most of your chargebacks are initiated by customers who live in the same country, maybe the risks of dealing with that market are much higher than you might have imagined.
Pay attention to your policy and make the necessary adjustments
You probably know that company policies need to be reviewed at least from time to time. After all, you can find flaws in these policies that customers take advantage of to initiate chargebacks. First and foremost, pay attention to the refund policy and whether it is too loyal to your customers. After all, they can sense it and take advantage of any flaw in your policy to successfully get their money back, even for a quality product.
Also, pay attention to your pricing policy so that the cost of goods is on the one hand affordable for your customers, allowing them to prefer your product to that of your competitors, but at the same time sufficient to ensure that the profits your company makes cover all the costs associated with chargebacks.
Stop struggling with chargebacks
That’s some advice! In fact, some chargebacks are really better to just put up with if the amount of those charges is much lower than the costs you incur to fight them. Otherwise, you run the risk of ending up in a situation where you can get back less than you spent, while wasting staff time and other important resources. If the amount is large enough, however, continue to fight to the end and prove your case in every way possible.
Pay attention to the evidence that you have. It is important to make sure that the evidence is sufficient to prove that the transaction completed properly.
The bottom line
Do not forget about such an important factor as the quality of customer service. After all, very often a hidden reason for a chargeback is the dissatisfaction of the customer with the quality of service provided by the specialists of your company. Do not give customers this kind of opportunity, serving them to the highest standard.
Remember that chargebacks should be fought if it is worthwhile. What’s more, such a fight may require much less effort than you expect.
If you need to accept and send secure bank payments across Europe and the world, the PayDo payment service offers the most comfortable conditions for opening a European IBAN account for non-European residents. In addition, our specialists provide high-quality support in the case of chargebacks.