Every business accepting credit cards faces the risk of chargebacks. These disputed transactions can result in significant revenue loss, costing you both the product/your time and the sale. At MSG Payment Systems, we understand the challenges you face and created this guide to help you minimize* chargebacks effectively. *Even when you follow this advice perfectly, there’s always a risk of experiencing and losing chargebacks.
Optimize your transaction processing
Proper handling of credit card transactions is crucial. For chip-enabled cards, always process them as insert/chip payments. For non-chip cards, use the swipe method consistently. When dealing with declined cards, refrain from re-charging or overriding. Instead, request an alternative form of payment.
For card-not-present transactions, implement robust fraud prevention technologies:
These tools are essential for identifying potential fraud before it occurs. We’ve seen firsthand how effective they can be in reducing chargebacks for our clients.
Manage your merchant account effectively
Your merchant account is the backbone of your payment processing. Ensure your business name and information are correct on your account and transaction receipts. This clarity helps customers recognize transactions, reducing confusion-based chargebacks.
Timely settlement is non-negotiable. Process your transactions within 24 hours of authorization to avoid “late presentment” chargebacks.
Opt for electronic notifications for retrieval requests and chargeback notices. Verify that your email address is correct in your account. Quick response to these notices is critical — delays can result in lost cases due to non-response.
Prioritize clear customer communication
Transparency in your policies is key to preventing chargebacks. Clearly state your return, refund and cancellation policies at the point-of-sale and on receipts. This clarity can be helpful if a customer attempts to return a purchase outside of your policy terms.
For businesses shipping products, use tracking notifications and delivery confirmation. These tools keep customers informed and provide proof the product was delivered. When processing returns, handle refunds promptly to prevent customer frustration that could lead to chargebacks.
For recurring payments, cancel immediately upon customer request. Prompt action in this area prevents future disputes and demonstrates your commitment to customer satisfaction.
Implement these strategies today
By adopting these expert-proven strategies, you can significantly reduce your chargeback risk and help protect your revenue.
Remember:
These aren’t just suggestions — they’re the foundation of effective chargeback prevention. As mentioned at the beginning, even when you follow this advice perfectly, there’s always a risk of experiencing and losing chargebacks. However, we’ve seen the results firsthand and know these steps make a positive difference.
Interested in learning more? Reach out to the MSG Payment Systems team today at msgpay.com.
