How to Prevent Chargebacks with Your Merchant Account

Any business that runs credit card transactions may be subjected to chargebacks from the customers. There are a few ways to prevent it from happening, and keep your merchant account and your bank account operating smoothly and profitably. In this short article I will provide you with a few tips to do so.

1. Be Honest

The most important thing in business is honesty, if you are honest with your customers, most likely they will be satisfied (if they decided to close the deal with you), and if they are satisfied there will be no reason for them to pursue a chargeback.

2. Use Address Verification

Use address verification, also called AVS, and verify the three (3) digits at the back of the card (4 front digits for AMEX).

3. Get Customer’s Signature

This is a very important tip, if someone signed for something, even if they pursue a chargeback and call their credit card provider, most likely they will not win the case if they signed for the transaction.

4. Shipping Confirmation / Signature Confirmation

If you run an online business (E-Commerce), it is recommended that you use shipping confirmation or signature confirmation for goods that are being delivered.

5. Refund

Have a clear refund policy and issue a refund to the client if needed.

6. Visible Contact Information

A reason many people do a chargeback is simply because they cannot get a hold of the business. Have a clear phone number listed where possible as well as an email address if you use one for your business.

7. Swipe a Transaction

When possible (especially retail businesses), swipe a transaction and don’t manually key in the credit card number. Swiping a credit card means that the card was present at the time of payment and that the cardholder was probably there as well, aware of the payment process.

8. Recognizable DBA

How many times you looked at your credit card statement and saw a transaction you do not recognize because you do not recognize the name of the business? Happens all the time! Make sure that your DBA (Doing Business As Name) is the same or similar to your actual business name that the customer would know and recognize.

9. Be Cautious

Always be cautious from customers that may use stolen credit cards, ask for ID if needed in order to verify customer’s name on the credit card.

10. Respond

Respond to all chargebacks and send supportive documents in a timely manner, do not lose a chance to get your money back.

If you need further assistance, please contact us at (855) 891-2600