Being a business owner, big or small, means that you have to deal with chargebacks and refunds at some point in your business. Try as you may, there is rarely a way to keep everyone satisfied all of the time.
When you have a chargeback, you have to pay a large fee, which cuts into your profits. If you have too many chargebacks, you run the risk of having your processing account closed. Refunds also cut into your profits and if you have to reverse the charges on a customer’s credit card for the refund, again, you may run into high fees.
The following tips will help you keep the chargebacks and refunds to a minimum, helping you maximize your profits.
Let your customers know if you use a third-party processing service, or if you use a different name for processing then where your customers are buying from. Explain to them what is going to show up on their credit card statement. Many people initiate chargebacks because they do not recognize a name on their statement. Make sure your customers understand if their statement will have your business name or a different name.
Fulfill your promises. When you advertise, make sure you fulfill every promise you made in the advertisement. If you promised free shipping on orders over ten dollars, provide free shipping. An even better idea is to give more than you promised to do. Go ahead and allow free shipping specials now and then. Surprise your customers and they will keep coming back.
Provide contact information. If your customers have questions or problems, they need to be able to get in touch fast. Provide a current email address or phone number. If they cannot get in touch, they might initiate a chargeback. Avoid this by giving contact information and responding in a timely manner.
Maintain your records. Keep track of transactions so if there is a chargeback later, you can back up the transaction with your records.
Use an authorization process that requires specific information. Chargebacks can occur when someone fraudulently uses another person’s credit card. By requiring specific information, such as the security number on the back of the card, you can avoid fraudulent use and chargebacks.
Be friendly. Providing your customers with friendly customer service will go a long way in reducing refunds and chargebacks. If your customers feel like they are being taken care of and their issues are being addressed, they are less likely to request a refund or initiate a chargeback. Be nice and your customers will be nice to you.