Chargeback effects on my Business
It used to be that if you got a faulty product, poor service or were simply double charged, you decided to chargeback the purchase. With today’s economy and fraud on the rise, chargebacks are becoming more main stream and more purchases are being made with stolen cards. Losses of jobs cause people to simply think twice about their purchases, or people simply keep the product and claim they never received it.
Illegitimate chargebacks are costing business owners, and it’s time to fight back against dishonest customers and fraud. I have surveyed 50 of my online merchants and found that most of their chargebacks come from people who order items online, and then in an attempt to keep the product without paying for it, dispute it. I consider this shoplifting.
Part of the problem seems to stem largely from regulations put in place stating anyone can dispute any charge for any reason. Naturally, crooks will use these regulations to their full advantage.
Many online merchants are losing the battle against chargebacks and feel there is nothing they can do. Online merchants should not give up; not all chargebacks are final. The best option is to respond to the chargeback letter immediately. Keep in mind that if your bank still honors the chargeback, you have the right to go after the consumer plus any costs you incur as a result.
Some key tips for combating against chargebacks are:
- Use a trackable shipping service and require signature on delivery. This provides you with documentation if a dispute should arise. If you sell e-books or other downloadable items, it is a good idea to add something tangible for tracking purposes.
- Make sure your return policy is clearly posted on your website. Post time limits for refunds and associated fees, such as restocking fees. Also note the condition of the product.
- Post a chargeback policy on your website. Don’t be afraid to report customers to collection agencies for excessive chargebacks.
- Make sure to pick a gateway that has a chargeback support feature. These gateways can help you find the best way to combat chargebacks and the correct way to respond to chargeback notices.
It is better to be safe than sorry. If you have specific chargeback issues and are looking for the best way to respond to your notices, feel free to comment. We would love to help.
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