It’s the nightmare of every business. You’ve put in the time and effort to create a product or solution, build your website, grow your customer base, and provide a seamless purchasing process… only to get hit with a chargeback.
As the name suggests, a chargeback means that instead of a mutually-agreed upon refund, the business is charged back – usually by the customer disputing the transaction with their bank. This immediately reverses it, meaning that your company is now charged the full amount of the transaction, if not more due to fees and penalties. And as many of us have experienced, it can be a real headache to gather evidence, file a counterclaim and recoup the funds. This can obviously have unpleasant financial consequences for your business, as well as impacting overall customer satisfaction. So what can you do about it?
The good news is that if you enlist the right payment processing company, this no longer becomes an issue you have to worry about managing on your own. So what should you look for?
Scope and Capabilities
Look for a company that can handle all types of businesses – should your company expand from brick-and-mortar into digital, you rapidly scale in growth, or something occurs that makes you more high-risk, you want to make sure transactions of any size, from anywhere in the world, and of any type can be handled. While some types of business (such as those in more high-risk industries) are more vulnerable to chargebacks, no one is immune. If you accept credit card payments, you could be on the receiving end of a chargeback.
In the aftermath of the pandemic, the old trope “the customer is always right” has proven to not always be the case. In some cases, maybe they were truly dissatisfied. But in other cases, it could be an illegitimate dispute. Analysts project that small and medium businesses will be hit with more than $130 billion in losses due to payment fraud over the next five years. Outsource the analyzing and monitoring and your time is yours again to focus on R&D, building revenue, and more. The right algorithms can make real-time risk assessments to proactively block anything fraudulent, leading to more secure transactions and lowering the odds you’ll receive a chargeback.
In that same vein, you want to look for a company that provides an integrated, streamlined solution. Choose a company that works directly with banks and processors where the backend data is automatically transmitted, and always available. This helps with the aforementioned monitoring. Should you be in a situation where you suspect you are still dealing with a fraudulent claim and want to counter it, you’ll also need to compile the proof needed that the transaction was approved, usually in the form of documentation such as digital receipts, customer data, previous transactions, etc. Having access to all this information in one easily accessible platform can help you stay organized and easily retrieve data needed.
You can have everything set up correctly to manage your business and avoid downtime, but if the company is vulnerable to cyber-attacks and data breaches, you and your customers could still be at risk. Make sure the payment processing company of your choice is able to encrypt customer and merchant data, shield the applications and network from breaches, and is able to ensure service uptime and front-end performance.
It’s important to make sure that the company is fully compliant with PCI data security standards when it comes to payment card data security. You want to be able to reassure your customers that their sensitive data and payment processing information will not be compromised at any time during the course of the transaction.
Exemplary, around-the-clock customer service
In the event that a customer is truly dissatisfied or an error is made, the company should have a customer service team that is readily available to respond quickly and take action – ideally 24/7/365! When it comes to finances, many customers are used to needing to wait for bank business hours to see anything come of their complaint, so getting ahead of it and being responsive goes a long way towards not only resolving the current problem at hand, but building trust and appreciation with the customer – potentially helping retention rates and improving overall customer satisfaction. Some customers may actually reverse a chargeback on their own if they have a positive experience.
While no business is ever fully safe from being hit with a chargeback, it is possible to outsource much of the headache around them by choosing the right payment processing solution. The right company will be fully secure and compliant, with the ability to proactively monitor and flag potentially fraudulent transactions while keeping diligent records.