Tips to Reduce Costly Chargebacks on Your Merchant Account

Merchant account holders pay per transaction, but if there is a chargeback on the account then they can be charged even more online payment processing. Chargebacks are essentially disputes between the credit card company, and the business owner. The customer usually initiates chargebacks, and there can be steep penalties for businesses who accumulate too many. This guide will help you avoid chargebacks using best practices.

Be Upfront

Your customers should know what they are buying, and how much it will cost them. Provide as much of that data as possible. If you’re hosting sellers, make sure they aren’t violating your terms of service by selling and shipping inferior builds of their products. Integrity will go a long way in reducing chargebacks for merchant services, and should be a cornerstone of any ecommerce marketplace.

Offer Refunds

You might not want to offer refunds because it means giving money back, but it’s much better than a dispute. Refunds are a happy medium, a good method for you and the customer to work a dispute out on your own. Offer them.

Be Wary

Fraudulent transactions tend to raise red flags. Look for bulk orders that were placed at the same time, and flag all big ticket item transactions for personal review. You should also require the CVV or CVV2 code at the credit card terminal, or online, when the customer completes a transaction, but it’s ok to do this periodically if you have the customer’s account information on file.

Be Fast

Customers want their purchases as soon as possible, and will complain if fulfillment takes too long. Not only does this hurt your reputation, it can lead to chargebacks. Combat this by fulfilling orders quickly, and creating a system to verify purchases so you don’t make costly mistakes.

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