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Protecting your business against credit card chargeback

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When you run a business, accepting payments is very important to run a business, but keeping that money safe from those payments from credit card chargebacks is a must.

Unfortunately, when enabling credit card payments, you fall at a higher risk, than cash or debit. This is why having proper optimization for chargeback protection is essential and gives a good impact on the health of your business. Learn how to protect against chargebacks in advance and help your business grow safely.

Tricks to fight against chargeback

You may not be able to prevent a customer from filing a case or a dispute against you, but you can imply a few policies and practices within your business to safeguard your business so that your business should not get any sort of hindrance to growth. Here are the four main ways you can protect against chargebacks:

  • Keep Your Transactions Record 
  • Have Amazing Customer Service
  • Imply Chargeback Protection Solutions
  • Honour Disputes

Keep Your Transactions Record 

A record of transactions is evidence that the customer made the purchase. If you have complete and clear documentation, you can give evidence that your customer authorized the credit card payment. This can be in any form of paper and/or electronic receipts or files.

Keeping an eye on your transactions regularly is beneficial in two ways.

One, sometimes a receipt or proof of transaction is all the customer needs to retract their chargeback. Remember, not all chargebacks are friendly faults; it can be that the customer just forgot about the charge.

Two, if you have to fight the dispute, you have strong evidence which can be your main move to protect your business.

Keep Your Transactions Record 

Often, customers will come to the company to communicate understand or dispute the charge before approaching their bank or credit card. If you are open to customer service, you may be able to dodge the chargeback from happening at an earlier stage.

Add a chat feature on your website so that customers can easily and quickly contact a customer service executive.

Make sure you have a working customer service phone number so to avoid a long wait over the phone, available 24/7 will be the cherry on the top. If your business gives a service of email, respond to customers within 24 hours of their message this will show how your company is proactive in terms of dealing with the customer.

Implement chargeback protection solutions

If you cannot prevent a chargeback, apply solutions to manage chargebacks when they are born. One of the easiest ways to do this is to adjoin with a payment processor who will enable the solutions to manage them for you and make them fruitful for your business

Chargeback management solutions include:

  • Putting all of your data on one platform allows for efficiency and improvement in your work.
  • Doing real-time merchant alerts starting from the first dispute.
  • Reporting in real-time so you can take quick measures proactively.

There are a lot of proven techniques to manage chargebacks and still, theories are floating in the market on how to crack chargeback when they hit the business. Apart from spending your time learning all of them, let a merchant account implement them for you.

Honor disputes

When you cannot stop the dispute initially, honor it. It is likely more money and works to fight a dispute than it is to honor it. So, create a process for dealing with chargebacks. Focus on preventing it first. Then, apply the proper policies in place to manage chargebacks when they take birth — and they will occur.

Don’t panic when you get your first chargeback. If you’ve put together plans to protect against chargebacks, you’ll know exactly how to deal and manage it. And when all else doesn’t fall accordingly, honor the dispute.

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Chargebacks are nothing new or something out of the box to the business world, and they aren’t going away anytime soon. Take a proactive approach to protect your business from the effects of credit card chargebacks by working with a high-risk payment processor, and honoring disputes when necessary. If you take these three steps, you won’t be investing your time worrying about chargebacks and can focus on growing your business horizontally and vertically instead.

Know why chargebacks create risk. 

There are many reasons that chargebacks bring huge risks to merchants. Many times the merchants run their business at a good pace and with good profit but suddenly huge hiccups can hinder your business and may create a huge gap in between.

Protecting against chargebacks can be a bit expensive.

If you run a company that is consistently having to refund customers for your good or your service, how are you going to earn any revenue? In fact, according to a study by LexisNexis, chargebacks cost merchants in the United States over 1.32% of revenue in 2021. That’s why chargeback protection is an integral part of your business plan

They make your business slippery 

Chargebacks are a known risk for all business owners, especially those who run a high-risk business. Not only are merchants aware of this, but banks are too, and banks do not want to take on businesses that are financially riskier in their nature. Some industries are more vulnerable to chargebacks than others, due to the nature of the industry.

Among many others, examples of highly vulnerable industries are:

  • Downloadable Software
  • Electronics
  • Cigars & Smoking Accessories
  • Furniture
  • Antiques & Collectibles
  • MLM & Direct Sales
  • Penny Auctions
  • Tech Support
  • CBD industry 
  • Adult industry  

Businesses that are high risk due to chargebacks and other factors are often not accepted by the banks and standard payment processors. So, when high-risk industry businesses are looking for merchant accounts, they must turn to high-risk payment processors. Luckily, there are reputable high-risk payment processors who will happily take on high-risk industries.

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