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Guide to Minimize Risks of Chargebacks

Its is important to anticipate the factors that might trigger chargebacks from the customers perspective. Often the merchants check the reason code of the transaction to understand the reason of a chargeback, however there might be factors such as product is not what expected, customer couldn´t find a contact email to request a refund or many other reasons that could trigger such an expensive and difficult transaction. Often, with some attention on improving description of the products or services and clarity of information and contact details goes a long way to avoid chargebacks.

Use a clear descriptor

The descriptor is what the credit card holder will see on his bank statement. If a customer don´t recognise the name of the charge, they will request a holdback. A familiar name or alternatively a well documented name will minimise the possibility of chargebacks. Make it clear for the customer what he will see on his statement. We recommend to use the URL of the business instead of the legal name, as this will be easier for the customer to identify. If you have complex network of online shops a clear descriptive page explaining the products or sites and showing the relation between them will help too.


Be ready to answer customers´ queries

It is important to have clear contact information as well as to answer the queries in a timely manner as the customer won´t wait for long before requesting the chargeback. A prompt response to the customer means he will try to resolve the issue with you first.

It´s always to good business practice to listen and address customer´s concern and problems. A good customer services goes a long way to create fidelity and consolidate a sales.

Notifications and updating the customer with progress is a good practice to keep him informed.


Consider refunds

If the customer is unhappy with the service or product, its better to offer a refund. An unhappy customer will try to get his money back one way or another and request a chargeback to his bank is not a difficult process.

Chargebacks are heavily balanced in favour of the customer, this makes hard to revert a chargeback. Chargebacks are expensive and require time and attention to handle. It is best to avoid this escenario altogether.

Offering clear information on refunds will naturally be the first and easier way for a customer to request his moneyback.


Avoid hidden costs

Charge customer costs that are not clear before they accept the service or product increment the possibilities they will request a refund or a chargeback. On memberships and recurring billing, if you take the credit card during the trial period, make sure the customer is happy to go on after the trial, otherwise they might forget and request a refund or a chargeback after the first payment.


Terms and Conditions

Clear and visible terms and conditions is a must for any online shopping. Apart of the legal implications, returns, refund and contact information should always be clearly displayed.


Product Delivery Receipt or Service Records

If you deliver a product, many merchants opt for an option where the customer has to sign upon reception of the product to avoid complains of not receiving the product.

If what you offer is either a product or a service, its good to have the dates of the transactions, amounts, conditions accepted, delivery informations etc.


Clear Information on Payment Page

The payment page is an important part of the user experience, and information such as amount, product etc should be clearly displayed.

Before arriving on the payment page it is a good moment to show all information needed, more detail the better. Services should be clearly described to answer customer expectations, products should have dimensions, weight, installations instructions and warranty etc..



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