Businesses are often launched to sell quality products and services. Providing services like online presence, digital payment transfer, and more makes a brand desirable to customers. However, the more convenience one tries to provide, the more challenges arise. Some common challenges of running a business are credit disputes and chargeback applications. These claims can cause the businesses’ reputation to take a hit, causing them to suffer consequences in their investors’ eyes.

Chargebacks
Payment reversals made by customers to a merchant are called chargebacks. However, the reversal is made directly by the financial institution that processed the payment. Such a case occurs when the customer chooses to pass over a refund complaint to the business and contact the bank for payment reversal. Chargebacks help protect credit card owners from fraudulent activities and questionable card charges. However, as good as it is for customers, it can be just as bad for businesses. It is, therefore, necessary for businesses to take the initiative and prevent chargebacks. The risks suffered by businesses are higher since the easy process means even fraudulent claims can be processed without the businesses being consulted about the payment reversal.

These six factors play a vital role in chargeback prevention:

Easy returns
A descriptive return policy is the first step to chargeback prevention as it helps set the bar for customer expectations and provides businesses with the necessary armor against unqualified chargeback claims. Having a detailed FAQs page on the website is of great help. Mentioning the terms of purchase, shipping, and returns on the website is also essential. Having detailed data about the post-sales customer service provided by the business works in the company’s favor. Communicating extra applicable charges throughout the purchase journey is another way of successful chargeback prevention. Customers are less likely to file for a chargeback if they’re aware of the charges that must be borne. Letting customers know about their purchase journey and what they can expect from the business are keystone factors that have been functional in chargeback prevention missions by numerous businesses.

Customer management
Confirming orders with customers before the final placement is a good business practice every company must adopt. Additionally, informing customers of their delivery status and expected time of arrival will benefit both parties involved. Most companies even provide their customers with links that allow package tracking. Keeping track of all this data right before the order was placed to its delivery helps companies fight chargeback claims and prevent return payments. That said, providing details to customers has also proven to be an act that brings repeat business to the company. The data collection works both ways too. If the product or service is delayed or out of order, the company can contact customers and update them. Offering the customer a timely refund or an alternative purchase goes a long way in chargeback prevention.

Delayed billing
Another common reason for dispute that leads to chargeback claims is the “nonreceipt of merchandise.” Delaying charging cards or customers up until the goods are shipped is a practice that can help prevent these claims. Businesses with slow shipping or long wait times can receive higher chargeback requests since customers have been charged without receiving their ordered goods. Such issues could cause customers to feel confused and disgruntled. Charging customers once their goods have been shipped is a better option. Avoid late charges as well to avoid “unprocessed credit” disputes.

Detailed contact information
If customers cannot find a way to contact a business or the response time is long, they are more likely to submit a chargeback application. Such a case occurs because the customer did not find a reliable means of communicating with the business. Businesses need to specify contact details clearly on their website and online profiles. If this information is easy to find for the customer, they will turn in their concerns. If the business is particularly busy, ensure that the customer is aware of the average response time. Hiring extra employees during peak seasons might even help reduce the wait time. Resolving customer concerns can help reduce chargeback applications if not prevent them.

Training the team
Employees of every team in the company can play their part in chargeback prevention as long as they understand what they are supposed to do and the kind of challenges that lead to chargebacks. Carefully and proactively addressing customer concerns is the key here; this incentivizes customers and helps prevent chargeback applications.

Companies need to meticulously train employees to identify fraudulent profiles and activities. Employees trained to flag suspicious user profiles, recognize patterns, and use tools to detect risky transactions can prove to be of great use to the company.