How To Fight an Enormous Chargeback

June 1, 2023

Online chargebacks are something that business owners should be aware of when selling services or goods on the internet. Are you dealing with chargebacks? What are the reasons you business is racking up chargebacks? How do you prevent chargebacks?

This article will give you answers to your all your chargeback questions.

What’s a Chargeback?

Chargebacks are contested transactions in fact. Clients dispute these fees on their credit cards for various transactions. When a dispute is made by them, the merchant reverses the money and the transaction goes straight back to the client.

Chargebacks can cause merchants many headaches with what the merchants go through to dispute a chargeback, which can be a complicated process. Because of this, they not only lose a sale but wind up with unnecessary penalties.

If a customer is a victim of identity theft and unauthorized transactions have been made, this consumer should contact the lender right off the bat. The cardholder is going to want to recover the amount that is stolen. The lender can also help prevent future losses. Even if the customer is dealing with fraud (or he/she thinks it’s fraud), the customer must communicate directly with the merchant.

Merchants need to be well aware of chargebacks and how to manage their chargeback ratio. Why, you ask? Very often a high ratio of chargebacks result in a closed account and can make it impossible for retailers to obtain a new one.

Have you any idea how to calculate your chargeback ratio? All you need to do  is to divide the number of chargebacks by the number of monthly transactions. By the way, the dollar amount of a chargeback for processors is of no significance.

Need Chargeback Insurance? How Do You Avoid Chargebacks?

If chargebacks are filed, and if you as the merchant are aware of transaction disputes, you’re going to lose revenue and potentially hurt your relationship with credit card processing companies.

Do you know why payment processors wish to see chargebacks under 2%? Well, your payment processor faces potential fines from Visa and MasterCard if your chargeback ratio is above 2% – if it even lets you continue processing.

Consequently, if your payment processor sees your chargeback ratio is more than 2 percent, then it will almost always terminate your account. Thus, you have to keep your ratio low.

Merchants who want to securely and safely accept payments ought to work only with credit card payment processors like PayKings, who specialize in high risk merchant accounts; and if your business is in danger of receiving tons of chargebacks, then it most certainly is considered to be high risk.

PayKings has you covered if you’re considering chargeback insurance. We tailor payment processing solutions to meet every merchant’s needs and let’s you prevent chargebacks safely and easily with our expert partners at Chargebacks911.

PayKings provides retailers with an system through our affiliate that will assist you in fighting chargebacks successfully. Therefore, you get the best shot at accomplishing the lowest rates of chargeback resolutions in the ways that are most efficient.

Which Are the Explanations for Lots of Chargebacks?

• Fraudulent transaction (fraud is the most frequent cause of chargebacks)
• Struggling to describe products and services appropriately
• Cardholder does not recognize the transaction
• Services isn’t rendered, or merchandise isn’t received
• Credit isn’t processed
• Duplicate processing
• Human error
• Transaction amount differs from the agreed-upon amount
• Recurring transaction is canceled
• Unauthorized email or telephone transactions
• Items aren’t shipped, or defective products are shipped
• Invalid credit card or account number

How Can you Maintain a Low Chargeback Ratio?

• Stick to a DBA or “Doing Business As” name that your clients understand
• Don’t fail to send confirmation and customer satisfaction emails
• Don’t forget to publish your telephone number on the customers’ billing statements
• Integrate customer dispute alerts
• Train customer service reps to start with a refund
• Maintain high transaction counts
• Don’t fail to verify the address, customer details, and phone number by the credit card issuing bank
• Clearly indicate what one should expect when making a purchase
• Have a refund policy page on your website
• Don’t take a credit card that’s expired

Expect substantial losses when chargebacks are under management. In addition, expect to lose your company’s good image in the eyes of credit card processing companies. Functional profitably can avoid chargeback issues, take the steps that are required to take advantage of the lowest chargeback rates.

Our experienced team has a wealth of experience helping merchants to better understand and mitigate chargebacks. Contact us today with questions regarding this topic or to set up a merchant account.