Chargeback is a process inherent to card transactions. It may therefore be impossible to prevent chargebacks entirely, but the risk can be kept to a minimum by taking precautions against potential chargeback situations.
What should merchants pay attention to in order to reduce chargebacks?
Informing customers about products and services
Especially in online sales, all details about the product or service offered must be presented to customers. Detailed descriptions and photos give buyers more realistic information about the product. Any missing information about the product, and any description or photo that does not reflect the product, will fail to meet customer expectations and increase the likelihood of a chargeback. Besides being descriptive, offering consumers the option to have their questions answered live at the time of sale will help reduce chargebacks.
Keeping records in order
When a chargeback is requested, the documents related to the transaction are requested first. It is therefore important to keep all information and documents for every transaction. Keeping all documents in an orderly way will help you submit them to the bank in the event of a chargeback request and do so within the time allowed to you.
Unusual purchases
One of the situations where chargebacks are frequently encountered is transactions made with stolen credit cards. For this reason, you should be more cautious about purchases that fall outside normal shopping patterns. Pay particular attention to high-value transactions made by a customer who has only just registered on the site. The risk increases further if the products this customer buys are easy to resell as second-hand items. You should also be careful when multiple transactions are made with the same card within a short time.
Informing employees
The vigilance of a single person may not be enough to prevent fraud and chargeback risks. It is important that all store employees have received the necessary information and training on such cases.
Working with a company that has good fraud management
Since most fraudulent transactions occur in online shopping, companies that operate online merchants should learn about the fraud monitoring structure of the bank or payment institution they work with, and it will be beneficial to work with the company or bank that does fraud monitoring more successfully.
Online merchants supporting 3D Secure transactions
Processing online purchases with 3D Secure removes the merchant's liability in potential chargeback cases. This minimizes the risk of merchants losing chargeback disputes.
