How to prevent chargebacks

Receiving a chargeback is never ideal. While never completely avoidable, you can take a few steps to lower your chargeback risk. The list below highlights some best practices in avoiding chargebacks.

1. Having a clear refund policy - Have a plan in place for when a refund is requested by your customer. Make sure that policy is clear on your website or in your terms and conditions. Merchants who have no refund policy, tend to have higher chargeback rates.  
2. Making it easy to contact you - If a customer is able to settle the issue with you, they are much less likely to charge back a transaction. In fact, issuing banks always request that customers attempt to settle disputes with merchants before filing a chargeback.
3. Stepping up your customer service game - Having a great customer service experience can reduce chargebacks. When you have a team who is responsive, accurate, and empathetic, your customer will feel like they were able to get their issue resolved. 
4. Upfront product descriptions - Represent products and services accurately by offering detailed descriptions and clear pictures. This helps customers have confidence in what they are purchasing and avoid a chargeback because the customer feels deceived. 
5. Avoiding manually keying credit card information - Everyone makes mistakes and keying in the wrong information could result in a chargeback. It’s always best to avoid manually keying in cards when it’s possible. 
6. Having clear billing descriptors - If a customer doesn't recognize your business on their credit card statement, you increase the likelihood of them filing a chargeback. 
7. Implement a fraud prevention tool - Having a fraud prevention tool in place helps identify fraudulent transactions before they take place. These tools can alert you to suspicious patterns, such as unusual purchase behavior or stolen card details giving you time to act before a chargeback happens. 
8. Cancel Recurring Transactions - If a customer files a chargeback, even for a non-subscription related reason code, make sure to cancel any future recurring transactions. Additional transactions can lead to additional chargebacks. 
    

Chargebacks can be expensive and time-consuming. By focusing on prevention, you can reduce financial losses, protect your reputation, and maintain a positive relationship with your customers.