It’s estimated that a retailer can expect to see one chargeback for every 100 transactions, but this can vary based on the industry or the demographic being targeted. No business can afford to lose money because of fraud, and depending on your current situation, it could only take one or two big chargebacks for you to close your doors. You should also know that some chargebacks are warranted, and you should do everything in your power to not trigger one through bad service. If you have been afflicted with chargebacks recently and are looking for a solution, here are some of the things you could do.
1. Stop Accepting Checks
If you’re currently allowing clients to pay monthly bills or invoices by check, you should stop immediately. Fake check scams are rampant, and it has been estimated that there were over 27,000 fake checks attempted in 2019 alone. The worst thing is that banks will sometimes charge your account before realizing that the check was fake, leading you to send merchandise while having to cover for the loss later.
A much better alternative would be to use something like Envestnet | Yodlee ACH payments. This ACH payments provider will allow users to pay directly from their bank account as if they would with a check, but it makes it nearly impossible for them to falsify their information. Envestnet | Yodlee will verify account information on the spot and make sure that the money leaves the user’s bank account and goes to yours instead of relying on a check and signature.
2. Don’t Give People a Reason to Chargeback
When people think of chargebacks they usually think about fraudulent chargebacks, but chargebacks are meant to be a protection for buyers against fraudulent sellers. So, if you misrepresent your product or don’t meet certain expectations, you run the risk of getting hit with a rightful chargeback complaint.
You have to do everything you can to make sure that the customer is happy with their experience. This means using accurate and very detailed descriptions, especially when dealing with personal products like clothing. Also, you should inform clients the minute their items have been shipped and give them a tracking number and information on how to track their shipment. This will prevent them from panicking, and they might be more lenient if the package is late because of the shipper.
Give customers an easy way to reach you and get back to them as soon as possible if they have inquiries. Also, make sure that shipments are properly protected to avoid damaged product claims.
3. Use Escrow
If you’re going to sell a website or any kind of online business, you need to use an escrow service. Escrow.com is a very popular and reliable one you can use for websites and also things like domain names.
Your money will be held by the service until the digital product is transferred to the other party. This will make sure that clients don’t file a chargeback a few months later for not receiving the product, in which case most credit card companies or payment services would tilt in favor of the buyer since verifying the transfer of digital goods is much more difficult.
While chargebacks are a normal part of business, they shouldn’t be too common. If you’re getting hit with a lot of them recently, you need to look at what you’re doing and consider making changes in the way you process payments or treat clients.
SUBSCRIBE FOR MORE! HERE'S WHY:
1. You get 7 free books
2. You get the best money & productivity articles
3. You get the latest updates - all in one email per week