Whenever a credit card user disputes a charge they find in their credit card history, one of the provider’s first steps is to demand that the retailer returns the value of the charge. They protect consumers from fraudulent charges, but they can also be extremely costly to the merchant.
How can chargebacks hurt your business?
Even when the chargebacks are limited purely to potential credit card fraud, they can hurt your company’s bottom line. The revenue from a sale goes back to the consumer, and each chargeback usually has an associated fee. Having too many chargebacks can get your merchant account frozen, your company blacklisted, and your company fined.
Less straightforward incidents of chargebacks, like friendly fraud, can be even more damaging to your revenue and your company’s reputation.
What tools do you need to reduce the damage of chargebacks?
Get instant alerts so you can respond.
Chargeback alerts often come in the mail. Delays are bad for business. Text messages give you more opportunity to straighten out the dispute. Text messages can also be integrated with other automatic process tools so the alert becomes a case in the appropriate employee’s workflow.
Export your records to Excel.
It’s not just individual accounts of chargebacks that need your attention. Keep a living history of all the chargebacks issued to your company. Even if you don’t use the document to maintain a status report, you can use the report to know when your company is in danger of triggering fines, an audit, or the termination language with your payment processor.
Respond through an online interface.
Responding through faxes and letters is cumbersome. It also increases the risk of delays and the chance you won’t respond within the appropriate window of time. But an online management tool lets you respond immediately, keep track of responses, and organize the dispute.
Go to BAMS to find these and other tools for your company’s payment processing.
