Whether it’s criminal or friendly fraud, a chargeback is an expensive affair for merchants. It’s important to recognize that preventive measures can mitigate but not eliminate the risk of costly losses. Communicate return, Preventing chargeback fraud, and cancelation policies to customers at the time of purchase (and remind them in future communications). This can help prevent ‘canceled transaction’ and ‘transaction not recognized’ charges. This could be as simple as a tick box or statement of policy on the ‘click to pay’ button for online businesses, or signage and verbal prompts from sales staff for store-based retail.
Preventing Chargeback Fraud: Effective Solutions for E-Commerce Sites
Review your processes, and make sure you have procedures in place to support evidence collection at each point of the sale. This can reduce ‘incorrect transaction amount’ and ‘product not received’ chargebacks, which are often the result of misunderstandings or forgetfulness. Reviewing your recurring payment processes is another good way to keep these types of chargebacks at bay. Make sure you have an easy process for putting a recurring order on hold or canceling it, and that customers are sent renewal reminders at key points in the billing cycle.
Some chargebacks are harder to prevent than others. But by consistently reviewing your business’s practices, processes and policies you can identify and fix areas that are contributing to the problem. Visit our article on common chargeback reasons for tips and insights on how to do this. Ultimately, this creates long-term protection against chargeback fraud, because you’re not just fixing the symptoms, you’re preventing the cause of the problem.
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