Do you often check your credit card statements? You should.
Late last year, I noticed that there was a charge on my credit card for hotel accommodation in California. Since I didn’t use my credit card for that (and I was in Las Vegas during those times), I immediately notified my credit card company about it and disputed the transaction. After going through their dispute process, they finally issued a chargeback to the merchant. They also changed my credit card to prevent unscrupulous individuals from further using my credit card details for fraudulent transactions.
As a consumer, I am very thankful for the consumer protection that the chargeback mechanism gives. However, as a business owner, I believe that chargeback management should be one of the areas that merchants should focus on because this is costly – not only will the business lose the dollar amount of the transaction, it will lose the merchandise or product as well.
The four common reasons for a chargeback are customer disputes, fraud, processing errors and authorization issues. Most of them are avoidable with proper transaction processing procedures and attention to detail. It also helps to properly train individuals who process the credit card transactions for the business or company.
Here are some practices that might help businesses minimize, if not entirely avoid, chargebacks:
- Be timely in depositing sales receipts and credit receipts with the acquirer, preferably during the same day (or at least within five days for the sales receipts).
- Avoid duplicate transactions by entering transactions into point-of-sale terminals only once and deposited only once.
- Do not substitute another item for out-of-stock items unless the customer agrees to accept it.
- Properly disclose refund, return and service cancellation policies. It should be printed, written or stamped in the sales receipt near the customer signature line before the customer signs. For internet merchants, these policies should be clearly posted on the website, communicated to the customers and requiring them to “click-to-accept” to acknowledge the policy, and shown in the same screen view as the checkout screen.
- Honor requests for cancellation of recurring transactions by canceling them immediately or on the day specified by the customer
Disclaimer: This is a sponsored post. However, all points and views are 100% mine.