Tips for Preventing Chargebacks

Modified on Mon, 25 Mar 2024 at 01:47 PM

The industry standard is that a chargeback ratio should be below 0.9% at the highest. The best way to handle disputes is to prevent them from happening in the first place. Below are some helpful tips to assist you with reducing the number of chargebacks you incur.


**Please note, when sending in a representment for a chargeback, it can take up to 120 days from the date of the chargeback for the bank to make a final determination. 

In addition, Once a chargeback has been initiated on a transaction, you cannot refund it. If you agree that the funds need to be returned to the customer, you will need to accept the chargeback.**

 

Best Tactics for Checkout:

  1. When taking payments, collect as much data about the payment (expiration date, CVC code, etc.) and the customer (name, address, etc.) as possible to allow for more rigorous fraud checks.

  2. To ensure the customer is aware of your policies before placing an order, add a checkbox to your checkout page that requires the customer to agree to all terms, conditions, and refund policies. Doing this provides compelling evidence for a representment if a chargeback is filed.

  3. Be sure to provide very clear policies on order returns, fulfillment, refunds, and chargebacks.

  4. Use recognizable descriptors so customers can easily identify where charges come from.

Best Tactics for Fulfillment and Post Checkout:

  1. Be sure to keep your customers updated on all aspects of their order from the items purchased, to shipping and tracking information, as well as delays.

  2. When there are expected delays, use only a pre-authorization, and wait to charge the card until the product ship.

  3. Follow-up with customers after purchase using automated emails confirming and reminding of orders, and to otherwise keep the customers informed.

  4. If a large volume of chargebacks is due to previously refunded transactions, review the timelines of refunds being processed and send a confirmation of the refund and projected posting date.

  5. If the soft descriptor is very different than the DBA or website name, clearly advise your customers of the unique descriptor before the purchase to prevent unnecessary chargebacks.



If you have any additional questions, please contact our Support Team by clicking the support widget in the bottom right corner of this page or email us at support@payments.ai.

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