Card processing chargebacks can become a nightmare to a merchant. It may be tempting as a merchant, to think that the card issuer is out to get you, but that is not the case. Chargebacks are there to prevent the cardholder from fraudulent use of their card. Fraudulent use can occur because the card or card number is stolen or a non-reputable merchant accepts cards without proper processing.
REPUTABLE MERCHANTS AND CHARGEBACKS
A reputable merchant will have chargebacks, especially if there is a high volume of transactions. Chargebacks just happens no matter how great the processor is or reputable a merchant is because people are human. They can be managed and the risk reduced, though.
CARDHOLDERS AND CHARGEBACKS
Nobody wants their card used fraudulently, but not all chargebacks are from fraudulent use. Some chargebacks are from human error. These can be managed to some extent, but not completely controlled. People forget purchases and merchants make errors when processing a payment.
MERCHANTS CAN CONTROL CHARGEBACKS
Not only must the money be returned with a chargeback, there are also chargeback fees. This can be done in the following ways:
- Inform customers how the charge will appear on their statement. If it will show up with a different company name than the name on the website, the customer should know so they are not surprised by any charges.
- When the customer has a phone number on the charge when it appears on the statement, they are more likely to call the merchant instead of the card company. This will allow the merchant to resolve any issues without a chargeback.
- Only charge for items when they are shipped. Pre-charging can cause problems if a merchant’s supplier can’t deliver on time or if the item is on back order.
- All credits should be executed promptly to avoid the customer contacting the card company and a chargeback occurring before you credit the card. Returns and refunds should be streamlined.
Chargebacks are for the benefit of the cardholder and can be managed by the merchant. Having a trusted payment processing company processing a merchant’s card transactions will help reduce chargebacks because of the verification process will reduce fraudulent use for e-commerce merchants and brick and mortar merchants. Contact Merchant Data Systems for more information.
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