The world of chargebacks is complicated (and at times, confusing). No one likes to get on the phone and reconcile an angry customer or lose out on extra cash at the end of a monthly expense report. Overall, the process is frustrating. We all just want our customers to be happy and pay for services again, right?
I’m here to help define the chargeback process. I can even help you cut costs while improving the efficiency of your business. Keep reading to learn more.
What is a chargeback?
A chargeback is when a cardholder receives a payment refund from their issuing bank. If a customer is unhappy with the service you’ve provided, he or she can dispute the transaction.
Unfortunately, the chargeback system is biased because the bank immediately issues the payment without discussing the matter with the business first. This allows for a “customer is always right” mindset but often leaves business owners high and dry. Ideally, clients would discuss payment disputes with the business that administered the service first.
What should I do if a chargeback occurs?
Though chargebacks can take a toll on your bank account, they’re unavoidable. That’s why having an established chargeback process is an absolute must. If you’re unfamiliar with the chargeback process, here’s what it should look like:
1. Remember that you always have the right to dispute a charge. Even if a customer is angry or upset, you must always advocate for your rights as a business owner.
2. Don’t be afraid to prove the customer wrong. When you’re disputing a chargeback, you must provide information like proof of shipping, receipt, and proof of delivery. Record and document any conversation with the customer to ensure all of your bases are covered.
3. The final and most challenging step of the chargeback process is arbitration. Arbitration gets the card association involved to help solve the dispute. Banks don’t like to move forward with arbitration due to the money and effort involved. After the card association reviews the case and a final decision has been made, the case is closed.
How do I prevent chargebacks?
The easiest way to prevent chargebacks is to effectively communicate with your customers. If you do have a refund policy make sure it’s published on your website and included in confirmation emails. Finally, make sure you invest in fraud prevention tools that align with your businesses’ needs.
If you have additional questions about chargebacks, get in touch. Visit my website or call (617) 843-5700 to learn more.
