How To Avoid Online Business Chargebacks


How To Avoid Online Business Chargebacks.

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How To Avoid Online Business Chargebacks


If your chargebacks exceed 1% in any given month your merchant account could be terminated.
Along with the increased sales this holiday season, many businesses will also receive an unusually high number of credit card chargebacks. Avoiding Chargebacks is essential to the survival of your business. If your chargeback percentage exceeds 1% of your total credit card sales you could be in danger of loosing your merchant account.
There are several ways to avoid chargebacks that really work, and almost every chargeback can be completely avoided by following these easy steps:
1. Use your Address Verification carefully. When ever AVS is available, do not accept an invalid or incomplete response. Most mail order and Internet chargebacks are cards that did not get a positive AVS response.
2. Ship low margin and high dollar items only to the billing address for the card. Use only shipping that can be tracked so you have proof of delivery.
Mail order and Internet sales may not have a signature, but if you have a delivery signature, you will have a much better chance of winning any dispute.
3. Include your customer service phone number on every invoice and monthly statement. If your number does not appear on their personal credit card statement, they may charge back the sale, just because they can't get you on the line.
This is a very common reason for chargebacks, so if your phone number is not on their statement, next to your company name, call your processor and ask them to add it today.
4. Keep good records of all sales. This sounds pretty obvious, but is often overlooked. Customers may dispute charges up to 180 days or more after the sale if they used a MasterCard or Visa.
Often only the card number is provided in a MasterCard or Visa chargeback, and the merchant must determine the customer's identity.
Sales drafts and invoices are your best defense, and more clearly they are worded, the less likely you are to have a chargeback in the first place.
5. Get a signature on file if you can. Having a signature on file is a good way to keep an authorization for each customer, should there be an identity dispute. Especially with reorders, you can have the customer fax back an "on-file" authorization, this way you can take phone orders with confidence.
6. Be sure your customers can remember the transaction. One common cause for chargebacks is when a customer buys from "Nancy's Sewing Supplies" and the charge says, "NSS, Inc.," on the statement.
The customer may have no idea what NSS Inc. stands for, and may charge back the purchase before realizing NSS Inc. stands for Nancy's Sewing Supplies.
7. Take extra time with recurring transactions, and monthly billing. Always send an invoice to customers in advance of billing to avoid the "cancelled recurring transaction," chargeback.
8. Declined means declined! To avoid "declined authorization," chargebacks, do not continue to obtain authorization on a declined card by reducing the amount requested, or by repeating the request.
9. Make your refund and return policy very clear to your customers. Display the policy at the point of sale, either the register, or the shopping cart if you are on the Internet. Also print the return policy on the invoice.
10. Verify suspicious orders. If you have any reason to believe a charge is fraud, call in a "CODE 10" authorization. This will alert the voice call center that you suspect fraud. The authorization center can attempt to verify if the card is stolen, or can verify for sure that the card holder is who they claim to be.
These are just a few of the many ways you can avoid getting a chargeback. MasterCard and Visa chargebacks will be deducted right from your bank account. You will be charged a fee as a rule, and a discount rate for the funds transfer, even if you win.
American Express and Discover customers will receive a request for a response before the funds are removed, and do not charge a fee for any chargebacks, even if you loose.
Merchants are fully responsible for the amount of the chargeback if they lose due to fraud, poor record keeping, late response or failure to meet policies.

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