How To Protect Yourself From Chargebacks?

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The advent and evolution of online methods of payment have brought about the intention of disputing a charge by customers.

When a customer figures out an extra charge by a merchant, such a customer, therefore, has the legal right to request a refund of money, which often comes in the form of a chargeback.

 

However, it is very important for every merchant to consider the number of chargebacks they get, because, the higher the number of chargebacks, the higher the loss they get.

Therefore, to protect yourself from users’ chargebacks, you must ensure to keep things in order, which will help prevent users from filing unnecessary Chargebacks against you.

In this article, I will show you how you can easily protect yourself from Chargebacks.

 

How To Protect Yourself From Chargebacks

 

If you don’t protect yourself from chargebacks, you are certainly going to end up getting a chargeback request from a card issuer, which isn’t going to be a favour to you.

To protect yourself from chargebacks, there are certain things you need to determine, therefore, the following are ways in which you can protect yourself from chargebacks.

 

  • Have a Return Policy

You need to consider having a policy that guides how a user returns a product purchased on your platform. This policy must be easily seen and identified by your customers, so they can choose their options.

Your return policy will contain every information needed when a customer wants to refund a product after it has been purchased.

 

  • Include detailed product descriptions on your website.

Allow users to have an overall perspective of the product you are selling. Also, the product described must be the actual product delivered to the intended user.

Providing detailed product descriptions requires providing comprehensive information regarding the product you are selling, the descriptions will be based on the actual type of product you’re selling.

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For example, if someone wants to purchase a smartphone from your website, you must include the colour available and the complete specifications of the device.

 

  • Provide an email address and phone number with your contact information.

Once a user files a chargeback, there is no way you can escape it. 

Perhaps, sometimes a customer will have to contact the Merchants, either by sending a message via the Merchant’s email or rather, calling the merchant through the phone number provided.

However, if you haven’t made your contact address available, there is a tendency that the customer will have no way to reach out to you, before filing a dispute with the card issuer.

Therefore, just as you should ensure the visibility of a return policy, you should also consider placing your contact addresses in a place that will be easily seen by your customers.

 

  • Always get a customer signature for card-present transactions.

To be sure that the transaction is legal, you must ensure always get the customer’s signature, this can be helpful for future cases.

Probably, when a customer denies authorizing any transaction, then the signature could serve as evidence that the transaction was authenticated by the customer.

 

  • Provide a Precise and Defined Refund Policy

Just as having a Return Policy, you need to consider having a Refund Policy, this will help acquaint the user with knowing everything associated with requesting a refund.

This policy should be easily seen by your customers as well.

 

How Chargebacks Works 

 

Now that you have understood what cashback is, now let’s know how it works.

There are several reasons why customers engage in chargebacks, mostly when a particular product shipped contains some damages, or shipping the wrong product, the customer has the opportunity to apply for a refund of money since the product delivered isn’t what was expected.

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A chargeback is a scenario, where a customer requests a refund of money, by going through the financial institution that issued their credit to a debit card, rather than seeking a refund from the business that sold the product to them.

However, as I mentioned earlier, chargebacks are good options for customers but could be a mess for your merchant or seller.

 

How to Initiate a Chargeback

 

Once users dispute a charge on their card, with a credit or debit card, the first thing they will certainly have to consider doing is to contact the merchant’s address, that is why it is necessary as a merchant to provide your contact address.

If contacting a merchant doesn’t seem to resolve the dispute, the customer is left with the option of contacting the card issuer or rather disputing the charge online. Most banks and financial institutions offer a feature that allows users to dispute any charges done with their card.

 

What Is a Chargeback on A Bank Account?

 

What Is a Chargeback on A Bank Account?

 

Whenever a customer disputes a charge on their credit or debit card. This is known as Chargeback.

Chargeback is dynamic and comes in different forms. Some reasons why people request for a chargeback is probably to get a refund of money after ordering goods online, and later on, they end up not receiving the goods.

Or, In cases where you experience an unauthorized transaction carried on your account, then you can simply dispute a transaction.

Once a chargeback is resolved, the customer will have the said amount of money refunded back to his or her account.

 

Why Is Chargeback Important?

 

As a merchant, you need to give much consideration to chargeback, not only does it lead to loss, but you will also have to pay an extra fee for a refund.

Once a customer disputes a transaction, you have no other option but to provide the necessary documents regarding the transaction. If you don’t have a clear refund and return policy, you are likely to lose the case.

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Conclusion

 

Chargebacks are things businesses need to consider. However, to protect yourself from Chargebacks, you must ensure to get certain things done that can serve as a backup or evidence when a customer requests a chargeback against you.

 

In this article, I have provided you with a complete guide on how you can protect yourself from Chargeback, if you have any issues, you can simply drop them in the comments box.

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