Having the ability to accept credit card payments for your business is a necessity. The internet has become the preferred way for people to shop conveniently all over the world. However, it is crucial that you do not encounter a high number of chargebacks. Stopping chargebacks before they happen saves you time, money, and hassle. The team at MobiusPay has developed effective chargeback prevention strategies that move you from defense to offense.
A chargeback occurs when a buyer contacts their credit card issuer and disputes the charge. Cardholders obtain their credit cards from their "Issuing Bank," which allows them to file complaints regarding fraudulent transactions on their statement. The issuing bank will then investigate the grievance.
If the transaction is determined to be fraudulent, the issuing bank will refund the original value to the cardholder. As a merchant, if you are not able to prove that the transaction was legitimate, the bank will take back the entire amount of the purchase from your merchant account, accompanied by a surcharge. If the complaint made by the cardholder is shown to be false, the merchant is not required to refund, but there may be additional processing fees. The reason why chargebacks should not burden your business is self-evident. These situations put you at risk of losing profits from services and products that were already paid for. Plus, there may be further payment processing fees, chargeback penalties, and additional currency conversion commissions.
Reasons for Chargebacks
You need to be aware of the most common reasons why merchants receive chargebacks. These circumstances must be identified and avoided. MobiusPay has a dedicated team that is able to provide you with the protection you need to prevent these chargebacks.
The internet is the go-to place for consumers to find information on services and goods, as well as purchase them from the convenience of their homes. However, if you are not using a service provider that will protect the financial and personal information of your customers, sensitive information could easily be used without authorization. When fraudulent transactions occur, the merchant is held responsible.
Credit Was Not Processed
Another common type of chargeback occurs when merchandise is returned. The purchaser requests a refund but claims that their account was not credited. Merchants are also held solely responsible in these types of situations.
The Items Were Not Received
Alternatively, a customer may claim never to have received an item that they paid for with their credit card. This is yet another situation where the merchant would be charged accordingly.
Many chargeback requests are the result of technical problems during the payment process. If there is an issue between the merchant and issuing bank, this may lead to consumers being charged twice for the same transaction (duplicate processing). Sometimes, there can be glitches in the authorization process. These types of issues might lead to a cardholder's account being charged, even if the transaction was declined.
Other triggers include faulty credit cards or simple human error during the payment process. Both of which are beyond your control as a merchant.
Merchants all around the world dread chargebacks, and rightfully so. Even though chargeback cases can be won with proper evidence, the appeals process is time-consuming. That is why it's always better to prevent rather than dispute.
Honesty is key. As a seller, always be sure to deliver on your promises and maintain excellent customer service. This way, if there is an issue, customers will not feel the need to complain to their issuing bank. Moreover, it is essential to prevent unauthorized and fraudulent transactions. Here are some red flags indicating possible fraud:
Your business needs to use a merchant service provider with a qualified team which helps evade chargeback situations. Not only will this save your business money and time, but it is also crucial for ensuring business growth.Return to Solutions