Guilty until proven innocent. That’s the view banks take when a customer disputes an online or mobile charge. The bank issues a refund. The credit card networks issue fines and penalties. And now it’s up to you to prove that the transaction was valid.
Unfortunately, you can’t stop customers from complaining to their banks instead of you. If you take payments online or through mobile devices, you’re going to be hit with chargebacks. But you can give them less of a reason to complain and take steps to ensure that your defense stands up.
Here at Pinpoint Intelligence, the leader in online fraud and chargeback prevention, we’ve identified 5 proven, simple steps you can take to prevent chargebacks.
1) Make sure your credit card descriptor matches the name on your website.
Imagine looking at your credit card bill and seeing a charge from a company you never heard of. After a second or two, you may remember the product or service you bought and realize that this strange charge you see on your statement was actually the corporate name. You probably realize this because you are in the business. Your customers are not. They forget and think there’s fraud.
Use the name that appears on your website as your credit card descriptor. Even if you list your legal name somewhere in the footer of your website, or even on the receipt itself, chances are, your customers won’t read it or remember the name by the time the charge pops up on their statement days or weeks later.
2) Display a phone number and/or email address prominently on your website.
Give your customers a few easy ways to get in touch with you. Yes, it’s hard for startups to have someone who can answer phones 24/7, but most people will be happy with an email address and auto response that tells them that the message was received and when to expect a human response. Online chat has become a great, cost effective tool that also allows your customers to interact with someone live.
Even without the issue of chargebacks, being available to your customers is just a good business practice. Giving unhappy customers a way to voice their concerns could help you save the sale or at least your company’s reputation with them.
3) Proved truthful, detailed descriptions on your website.
A disappointed customer won’t reach out to you with a complaint, but go straight to their bank. The easiest way to prevent this problem is to manage expectations from the outset.
Provide detailed descriptions of what you’re selling. If it’s a product, show it from many angles. Include dimensions so people don’t think it’s smaller or larger than it appears in the picture.
If you’re selling a service, give a detailed description of what the customer can expect. If it’s software, list the features and functionality you offer. Don’t exaggerate with features that are not yet available. You can always add them to the description later
4) If someone complains, give them their money back.
You provided the service. You delivered the product. It’s everything you said it was but the customer’s unhappy. No matter how wrong the customer may be, give them their money back.
The reason is simple. Think of it as a kid on the playground, throwing a temper tantrum. If a customer doesn’t get their money back from you, they go to the bank. The bank issues a chargeback and the credit card networks issue a fine. So you lose more than just the cost of the merchandise. More important, if your business has too many complaints or chargebacks and you can lose your credit card processing privileges altogether.
Better to issue the refund right away. In fact, it might help to prominently advertise a 100% money-back satisfaction guarantee on your website and in your invoices. Even the smallest details can make a difference.
5) Use the AVS and CVV
Ship goods that bought with a stolen credit card and you lose twice. Remember, you lose the merchandise, any restocking or shipping costs and you’re responsible for the chargeback fee.
The Address Verification System (AVS) helps thwart invalid charges by simply requiring a customer to provide their billing address when they make an online purchase with a credit card. The house number portion and postal code of don’t match the billing address on file, the transaction is declined.
Card Verification Value (CVV) was established specifically to help reduce internet transaction fraud. It’s the three digits that appear on the back of a MasterCard or Visa after the card account number. It’s the four digits on the front of American Express cards, just above and to the right of the embossed card number.
Not part of the card number itself, it can’t be stolen by standard card skimming technologies. Rather it provides an automated cryptographic check of the information that is embossed on the card. In helps ensure that the customer placing the order actually possesses the credit or debit card and that the card account is legitimate.
At Pinpoint Intelligence, we offer a number of sophisticated tools to help online merchants and direct marketers prevent fraud and reduce chargebacks. 3DS is another highly suggested tool to help alleviate these risks. For more information about this solution for your business, click here.