Many business owners grapple with high chargeback ratios, often feeling powerless to address them. But a significant insight to consider is that around 80% of chargebacks are due to “Friendly Fraud,” not actual theft or stolen credentials. This realization opens up avenues for proactive chargeback prevention, starting with your customers.
Understanding the Rise in Chargebacks
With an increase in card-not-present fraud and consumer abuse of the chargeback process, it’s crucial for businesses to reassess their strategies. A deeper understanding of your chargeback ratio can lead to effective measures to reduce and manage fraud incidents.
Part 1 Recap: Consequences of High Chargeback Ratios
In our previous discussion, we explored the impact of high chargeback ratios on businesses. Now, we’ll delve into actionable steps you can take to manage and reduce these occurrences.
Disputing Illegitimate Chargeback Claims
Disputing chargebacks is a tedious yet critical process. Distinguishing between legitimate claims and friendly fraud is essential. Providing compelling evidence, which is often readily available through transaction data, can help successfully dispute unjustified chargebacks.
Record Keeping: Your First Line of Defense
Maintaining detailed transaction records is vital. This includes purchase time and date, product descriptions, delivery proofs, and digital footprints like IP addresses and geolocation data.
Proactive Steps to Reduce Chargebacks
Preventing chargebacks begins with enhancing security protocols and customer satisfaction measures.
- Clear Product Descriptions: Ensure your product descriptions accurately reflect what the customer will receive.
- Enhanced Communication: Regular updates about order status can significantly reduce customer disputes.
- Utilizing Fraud Prevention Tools: Implement tools like CVV and AVS checks to identify fraudulent transactions proactively.
Managing Friendly Fraud
Addressing friendly fraud involves clear policies, especially for subscription services. Clear terms and conditions, along with visible opt-in checkboxes, can minimize misunderstandings and disputes.
Aligning Company Name and Billing Descriptor
Ensure your billing descriptor is easily recognizable to customers to avoid confusion and subsequent chargebacks.
Working with a Knowledgeable Merchant Service Provider
Collaborating with an experienced merchant service provider can provide invaluable insights and tools for chargeback management tailored to your specific business needs.
If you’re navigating the complexities of chargebacks and seeking effective strategies, contact Bankcard International Group. Our team of ETA Certified Payment Professionals is dedicated to helping you create an efficient chargeback management strategy.
