5 Tips for Minimizing Chargebacks
Chargebacks happen when customers contact their credit card issuers to dispute charges. If the issuer deems a dispute valid, your merchant account is debited for the credit card charge that had previously cleared -- you're out the money, plus a chargeback fee from your Processor.
Chargebacks are a costly and unfortunate fact of life for many businesses that accept credit cards. However, there are ways you can protect yourself against unfair chargebacks. Below are 5 tips for minimizing your chances of receiving a chargeback:
1. Once and Done – Do not complete a transaction if the authorization request was declined. Also, do not repeat the authorization request after receiving a decline. Instead, ask for another form of payment. 2. Don’t Ignore the Red Flags – If you receive a “Call” message in response to an authorization, do not accept the transaction until you have called your authorization center. You will need to answer questions, and the operator may ask to speak to the cardholder. If approved, make sure you write down the authorization code on the sales receipt. 3. Pay Attention to Detail – Take a close look at the card. Make sure the “Good Thru” or “Valid Thru” date on the card hasn’t expired. 4. Swipe, Don’t Type – Avoid “card not present” situations at all costs. Do not process a transaction in which the cardholder provides the card number, but not the actual card. Even with an authorization approval, the transaction can be charged back to you if it turns out to be fraudulent. 5. Have Clear Refund & Return Policies – Make sure that the conditions of the sale are printed on the receipt near the customer’s signature, and that they receive a copy of the receipt.