Your 4-Step Guide to Managing Chargebacks

Chargeback management has become part and parcel of conducting business. As it becomes easier for customers to dispute charges, and with banks usually siding with customers, it is essential to take proactive and preventative measures so that illegitimate chargebacks do not cut into your bottom line.

When you receive a chargeback notification, it is not a done-deal situation. There are still some specific measures that you can take to disprove the dispute:

Step 1: Familiarize Yourself With the Reason Codes

Chargebacks stem from three main complaints: clerical errors such as duplicate charges, quality issues such as when customers claim to have not received items or received them damaged, and fraud suspicions.

Every bank has different codes that are assigned to each type of chargeback. It’s helpful to know what each code means so you can assess whether the chargeback is legitimately based.  For example, if a customer charges back for receiving items later than promised when you could prove that the item was delivered on time or early.

Step 2: Keep Clear Records

When it comes to chargebacks, documentation is your best chance of defense. Keeping records of credit card purchases, and asking for signatures at purchase are some ways of proving that charges are legitimate.  For deliverables, keeping clear records of package shipments and tracking numbers will disprove a significant number of chargebacks as well.

Step 3: Encourage Customers To Bring Issues to You Directly

If customers have an issue with their purchase, make it convenient and easy for them to speak to you directly. Often, simple clarification can prevent the majority of chargebacks. It is also less costly to allow a return or refund of an item than to have it charged back and pay for the item twice, plus the fees associated with the chargeback.

Step 4: Make Sure Your Customers Recognize You

Many companies have an official name and a DBA, which is the name that they are known by and use in their day-to-day operations. Sometimes a customer will not recognize a charge on their statement and dispute it simply because they didn’t recognize the merchant. Fidelity offers a feature called “Dynamic Descriptor” which allows merchants to have the name displayed on statements to be based on a merchant’s DBA or for a particular event or location.

Fidelity’s support team specializes in chargeback assistance. By ensuring that you have sufficient understanding and defense of the charges, and then preventing further charges with exceptional customer service and recognition, you can effectively lower the time and expense of chargebacks.

Speak to a representative today for assistance in setting up your business for chargeback defense and prevention.