6 Ways Merchants Should Be Proactive to Reduce Chargebacks
What is a chargeback?
A chargeback is where a customer disputes a charge to their credit card. This can be prompted by goods and services not being delivered as agreed or the customer identifying that they did not authorize the transaction and that it may be fraudulent.
1. When selling your goods and services take the time to provide an accurate and detailed description of what you are selling to ensure that the customer knows exactly what they are buying before they transact. Confirm the transaction with an SMS receipt (activate this feature on the settings page of Payment Manager or Virtual POS).
Identify the customer you are selling to
2. Gather as much information about your customer as you can at the point of sale before processing the transaction. Where possible get a signature from the customer for the purchase. If the purchase is online this may happen on delivery.
Authorize the credit card that is being used for the transaction
3. Ask your customer to enter the 3 digit CCV number (Mastercard and Visa) or 4 digit CCV number (Amex) which is the card code on the back of their credit card. This helps reduce chargebacks where someone may have stolen your credit card number but does not have your credit card on them.
Ensure the charges on your customer receipt are correct and true
4. Make sure that the receipt that is issued is true to the purchase that has been made by the customer. Is the amount correct? Are the credit card details current? Make sure that the customer has not got a basis to challenge the transaction that may have been caused at the point of sale.
Advise your customers as to what will appear on their bank statement
5. Advise your customers as to what they will appear in the description on their bank statements when they receive them so that they recognize that the purchase was made with your business.
Deliver superior customer service
6. If a customer query on a transaction is received by your business act promptly to address it and you may avoid a potential chargeback just by listening to your customers and providing good customer service.