11 Ways High-Risk Merchants Can Prevent Chargebacks By Alex Roy

by Alana Jones on February 18, 2019

Summary: Chargeback prevention is critical when running a successful business. Here are 11 ways a business can successfully reduce chargebacks.

Preventing chargebacks is one of the most important things you can do as a high-risk business. Below are eleven ways a high-risk merchant can reduce their chargebacks.

  1. Provide Product Details

Customers’ product expectations, of course, impact chargeback rates. It’s important to provide accurate product information covering:

  • Color
  • Material
  • Size
  • Quantity

An important note on digital products: Because they’re not “tangible,” it’s even more important to set clear expectations.

  1. Set Custom Order Expectations.

With custom product orders, customers are likely to invest more emotion into the product. This makes the orders more prone to “not as described” chargebacks. If possible, try to show what the finished product will look like as accurately as possible.

  1. Analyze Your Marketing Sources

You should carefully examine how your customers get to know your product, since this affects chargebacks. A pay-per-click ad campaign allows a great extent of control over how your product is marketed, as opposed to an affiliate system.

  1. Get the Basics Right

Using Address Verification Systems (AVS) ensures that the address the customer entered for their billing information is the address on record. Similarly, card codes are designed to establish that the customer is in possession of the card used for the transaction.

  1. Make Use of Your Billing Descriptors

The billing descriptor is the short description your customer will see on their credit card statement. Make full use of it as a way to reduce confusion on your customer’s end by providing an accurate business name and clear contact information.

  1. Shorten the Time Between Sale and Delivery

Obviously, delivery time significantly impacts chargebacks for ecommerce. If a significant amount of time passes from when you charge the customer to when they receive their products, the likelihood of chargebacks increases.

  1. Notify Your Customers Before Recurring Billing

With recurring billing, it’s highly advised that you give your customers a heads-up. When there are fewer surprises for your customers, you’ll undoubtedly help prevent chargebacks.

  1. Have Realistic Delivery Estimates

Be as objective as possible when you provide a shipping estimate to your customer. If your product arrives significantly later than what you indicated, it might increase your risk of chargebacks.

  1. A User-Friendly Policy Can Mitigate Chargebacks

Your return policies should be customer-centric to mitigate chargebacks. Make it easy for customers to find, understand, and access them. Policies should be easy to find before, during, and after a purchase.

  1. Show Your Customers That You Care About Them

Make sure your customers feel heard. There are multiple ways you can achieve this:

  • Live chats
  • Support email accounts
  • Call centers
  • Social media platforms

However, keep in mind that speed is vital; customers have different expectations than yours.

  1. Sign Up for a Chargeback Mitigation Program

There are many things you can do to prevent chargebacks. However, some are outside of your direct control. The right professional mitigation program may help you avoid and manage your chargebacks.

Alex Roy is the founder and owner of E-Commerce4IM.com, and an experienced high-risk payments specialist. This article appeared in issue 45 of FeedFront Magazine, which was published in January 2019: Visit Here 

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