In our last article, we discussed common causes of chargebacks. Now that you have a better understanding of why chargebacks happen, it is time to implement an effective system to reduce the risk of chargebacks. Prevention is essential to reduce the risk of losing money in your business. The best way you can fight chargebacks is by avoiding them in the first place. Here are a few tips to help:

  1. Upgrade Your Point of Sale (POS) Terminal: Using the latest technology for your POS terminal helps you eliminate the risk that stolen credit cards can be used in your store. An EMV chip reader makes it difficult for stolen credit cards to be processed. Additionally, this technology shifts the liability back to the credit card issuer, helping you minimize the cost of chargebacks. If you process online payments, then consider the use of #3 secure processing technology.
  2. Identify System Errors: Any time automation is used in your company, the risk of errors might have an impact on chargebacks. Examples include shopping cart errors or duplicate transactions. Audit your transaction system to eliminate these problems proactively.
  3. Upgrade Customer Service: A high frequency of chargebacks could be related to the quality of customer service offered by your company. It is common for customers to attempt to work with the company when something goes wrong. An unhelpful or rude customer service staff might motivate the person to file a chargeback instead of working through your company for the refund.
  4. Clear Company Identification: Make sure that you are using a payment processing system that offers clear information on the credit card statement. Customers need to recognize your company information on the transaction, helping avoid the accidental chargeback when the cardholder reviews the statement.

Chargebacks can be costly. Not only is the payment amount refunded, but you also face costs for the transaction fee and other penalties. These costs vary depending on the merchant service provider, your account risk, and the size of the transactions.

The best solution is to be proactive with the prevention of chargebacks, helping you avoid the risk of these costs cutting into your profit margins. For more information about effective payment processing, our team is here to help. Call to learn more about the way we can improve your credit card transactions.