The chargeback process happens when someone requests their bank to refund their money for a transaction. The customer has the right to dispute any charge (unless it’s for something like recurring shipping costs, etc), however doing so is not always good business practice; if you lose the disputed case, your merchant account will be charged with processing fees and can even be blacklisted from certain processors.
There are a few things you can do to increase your chances of winning a chargeback case:
Document Everything: Keep detailed records of all customer interactions, including dates, times, and contact information. Make sure to save all email correspondence and any other documentation related to the purchase.
Use Tracking Numbers: A shipping or order tracking number is a must-have in case there is a dispute. It provides documented proof of delivery and/or shipment.
Include Expiration Dates: This pertains to subscription plans, etc. If your customer does not cancel after the trial period ends, they will be billed for an ongoing membership that they are still using.
Get a Signed Statement: If you are fulfilling orders to independent contractors or third-party agents, make sure they sign the sales receipt to acknowledge their purchase. This will support your case if any chargebacks happen in the future.
Fight Fraudulent Chargebacks: Be careful who you hire to do work for you—if you hire a company from Craigslist, eBay, Fiverr, etc., they could scam you by using stolen credit cards to buy your products. You’ll win the chargeback if you can prove that it wasn’t one of your customers’ authorized charges.
Always Respond Promptly: If a customer files a dispute and expects an immediate response, be sure to get back to them as soon as possible. This shows that you’re taking the case seriously and that you’re trying to resolve the situation as quickly as possible.
By following these tips, you can help ensure that your business doesn’t get hit with any processing fees or blacklisted from certain processors due to chargebacks. And, more importantly, you can help reduce the chances that your customers will dispute a charge in the first place.
