People love to pay for things with their credit cards. It is just so much easier to use credit cards than to carry cash. Using them also offers consumers protections that cash cannot. Losing a credit card is not a big deal, you can get your card replaced and not be held responsible for any charges that are made while you do not have the card. With cash, if you lose it, it is just gone. The problem with credit cards, for businesses, is that people do commit “friendly fraud” by misusing the chargeback process. For many, merchant chargeback protection is a real concern.
Tips for Merchant Chargeback Protection:
- Know your payment processor service’s policies and follow them. For transactions where the customer is present with their credit card in their hand, you should do a few things. You can check the expiration date, take the security number on the back of the card and check the signature on the card against the signature the person gives on the sale. If you are concerned about a transaction, you can also ask the customer for their identification. Many cards have a photo of the card holder, you can check that as well. For online purchases, you can get the security code and verify the billing address and zip code. Many secure payment services offer merchant chargeback protection options. It may be possible to take additional precautions such as capturing the IP address of customers when they made purchases, for instance.
- Make sure your customer recognize you on their bill. If you are part of a larger company or if you use one name on your store or business and another for your billing, use a clear payment descriptor to let your customers know any charges they see from you are you. When people see things on their bill that they do not recognize, it only makes sense that they call their credit card company and question the charge. This is an easy problem to prevent or to fix. Merchant chargeback protection experts recommend using this field if you know the charge on a credit card statement from you will have a different name.
- Provide excellent customer service. If a customer contacts the issuer of their credit card about something they bought from you, you should get some notice about this. Take this opportunity to reach out to the customer. You may be able to make the situation better by dealing with the issue as a refund rather than a chargeback. The customer may really appreciate that you took the time to contact them and try to rectify the situation. People really appreciate it when a business takes their concerns seriously enough to contact them.
- Know fraud when you see it. If you sell products online, you need a merchant chargeback protection policy. If someone tries to buy something and they do not know the billing address and zip code for the card they are using, you should not let that transaction go through. When someone is in front of you, set an example for your staff by checking the signature, expiration date and even identification of anyone you suspect is trying to use a card that they are not authorized to use.
- Make sure your employees know how to process credit card sales. All of the people who work for you should be thoroughly trained on how to deal with any kind of transaction that uses a credit card. You can also train your employees on merchant chargeback protection and prevention methods. Make sure they understand the policies set out by your credit card processor. Make it your business’s policy to check signatures on credit cards when the customer is present.
Credit card fraud is a real problem for many businesses. Every year, it costs the United States economy at least $8 billion. In 2014, credit card fraud cost the global economy more than $16.3 billion. Experts have estimated that by 2020, that number should skyrocket to be more than $35.45 billion. While you may not be able to prevent all chargebacks that your business has to deal with, if you follow these tips, you can prevent at least some of them. This can only help your bottom line.