How do I avoid chargebacks?

A chargeback occurs when your customer formally contests a sale with their  issuing bank. Chargebacks are a costly and unfortunate experience for many businesses that accept credit cards. Most of the time, these issues are the result of a simple misunderstanding or human error. However, there are ways you can protect yourself.

 

• Respond to customer complaints quickly and professionally. By resolving a dispute before the customer calls their bank, you can save yourself a lot of time and effort.
   

• Provide a clear return policy. Make sure your return and refund policies are easy to find and understand. If you feel the customer may win a dispute, it may be cheaper to offer a refund than to lose a chargeback.

 

• Use a clear payment descriptor. A lot of disputes have to do with unclear payment descriptors as it appears on your customer’s bank statements - a parent company name appearing instead of the store’s name for example. Also known as a "DBA" - choose something recognizable for your customers!
   

• Learn to spot warning signs of fraud. If you’re processing in a card-not-present environment, remain diligent in recognizing suspicious activity, additionally:
   

  • Set your AVS and CVV filters, as well as your Daily Velocity filter and your Transaction Limit filters.
     

  • Take pictures of products from several angles and/or provide detailed descriptions so customers know what to expect when they buy.
     

  • Provide realistic delivery windows.
     

  • Use a shipping service that provides online tracking. This can help confirm that items are delivered.
     

  • Delay Shipping High Risk or Suspicious orders.