Chargebacks are always a big issue for high-risk merchants, and day and night, they are focused on efforts to help remove this problem. However, it is impossible to waste all-time managing chargebacks, which is why some simple yet effective ways are required to handle the issue. While doing a risky business, the merchants learn many things from their experience. Also, merchant account providers and payment gateways always suggest innovative ways to the merchants for troubleshooting. This blog will discuss the significant and effective ways a high-risk merchant account holder can efficiently manage chargebacks.
What is a Chargeback?
Before we move further to delve into the practical ways of handling chargebacks, let’s know the meaning of a chargeback.
A chargeback is a customer’s claim for payment reversal through a card-issuing bank after making a payment to the merchant.
Another way to demand money back from a merchant is a refund, in which a customer directly reaches the merchant for the money back.
How To Manage Chargebacks In a High-Risk Merchant Account After The Customer Has Made a Claim?
Now comes the actual action plan explaining how you can tackle chargebacks with a high-risk merchant account through varied points and aspects.
Find the actual reason for a chargeback because a merchant can also dispute a chargeback. You can win the claim if you provide ample proof to justify that the transaction was genuine. In that case, it will not be necessary to refund the money. If your high-risk credit card processing happens in a lawful manner, the chances of winning the dispute are higher.
File the dispute if you think it is friendly fraud. As we know, many customers intentionally raise the claim. They use the product or service, and then they mention flaws in it and claim chargeback. It is a popular way to take the undue benefits of the products free of cost. But if the merchant is confident, he can always file the dispute; next time, the customer will be afraid before raising an argument for a chargeback.
Update safety precautions because sometimes customers demand a chargeback when they are not so sure about the safety of their money. In that case, your payment system may have some flaws. It is better if you update your software and design. However, nowadays, the high-risk merchant account providers, as well as payment gateways, are PCI-DSS compliant. But it is better to check your payment network for safety regularly. Maybe a new virus is causing some issues on your website, and you are unaware of it. Get your websites or apps checked periodically.
Monitor your product delivery system strictly because if your products do not reach the customers in the proper condition, they will claim a chargeback. Maybe your product is missing, and something else went to some customers. It means they ordered for a different color or quantity, but the delivered product differs in these two aspects. Also, you need to closely track the delivery staff that may be misbehaving with the customers. You need to be aware of every part of your business network because anything can make the customer unhappy. An unsatisfied customer will surely demand a chargeback. Repair the flaws in your business, and there will be no money-back issues.
How to Prevent Chargebacks Before they Happen?
You manage a chargeback after it happens, but why should let this problem occur? Several ways can stop the chargebacks before they happen. Isn’t that a better idea? You worked so hard to get a high-risk merchant account instant approval; chargebacks happened when you got it. This is your business, and it is time to take control of your hands and manage your merchant account successfully. Have a look at some of the ways to prevent chargebacks –
A 3D-compliant website or app is safe from hacking issues, and customers can pay safely. When customers feel safe, they stay for a long time with the same merchant. Is your website working under compliance rules?
Post detailed product and service descriptions and pictures because the buyers should know what they are buying. Misguided information can cause chargeback, but no significant issues should happen if you are transparent about what you sell.
Explicit mention of chargeback policies is necessary to ensure that no customer claims a chargeback that sounds like a friendly fraud. It is not a child’s play to manage high-risk merchant processing; caution is required at every stage.
Give a timely reply to customers’ calls and queries even if it is not a chargeback demand. Sometimes customers ask for a chargeback when they are unsure about the future possibilities of a product or service. For example – a forex trader who wants to know about some future things may feel unsatisfied if he does not get a timely reply. In that case, he may make up his mind to close his account with the forex merchant and raise a chargeback demand due to some of its bad experiences.
Most customers want only a good experience from a business and do not want to get into the complications of a chargeback. With attention to detail and transparency, you can keep the customers, and they will never ask for their money back.
The above ways before and after the chargebacks will surely help your business flourish without any insecurity of chargebacks. It has always been difficult for merchants to manage this issue. But, nowadays, with advanced tools, high-risk merchant payment processor companies successfully help businesses prevent chargebacks. You should not worry about anything because today, it is not rocket science to manage money-back claims by customers. The only need is to play fair because, in that case, a merchant can dispute a chargeback claim. However, it is true that ordinarily, card-issuing banks favor the customer because they do not want to lose a cardholder. But if the merchant has the appropriate proof, it is not impossible to win a chargeback dispute.