Online merchants have chargebacks as their number one problem. There are three basic reasons for chargebacks.
1. Criminal or Actual Fraud
This happens when a fraudster uses other cardholder’s information to purchase items from a merchant.
2. Merchant Error
Negligence made from the part of the merchant where the merchant failed to shipped out the item purchased by the customer or shipped out broken or wrong item that is far different from what is described in the product page and failed to provide the customer a good customer service to possibly rectify the situation through refund or item replacement giving the customer no other option than to file for a chargeback. Other merchant errors that result to chargeback are unnecessarily restrictive return policies and disregarding customer grievances or queries and failing to follow through with the promised returns or cancellations to customers.
3. Friendly Fraud
It is also known as chargeback fraud where the authorized cardholders dispute seemingly legitimate charges made to their cards and files for chargeback due to the Friendly fraud.
a. The customer wants to avoid paying the order in question and instead do the Friendly fraud.
- Report that the item wasn’t delivered.
- Claimed that the item delivered failed to match the online description and because of that the customer doesn’t want the item anymore.
- Reported that the refund was not processed by the merchant whereas the item was said to be returned already by the customer.
- The item was still delivered even if the customer says that they already canceled their order.
- The customer doesn’t remember making the purchase and thinks their credit card must have been compromised wherein they might have just forgotten they made the purchase or their card was used by another household member and made a purchase in their name.
Majority of chargeback results from merchant error and friendly fraud. Friendly fraud other hand happens when a customer who has a valid ground for refund directly seeks the refund from the bank without coordinating first with the merchant because customers do not understand the damage that occurs to merchants when chargeback are requested and they think that it is easier to deal with the bank than request for a refund directly from the merchant. This customer confusion can be prevented by providing excellent customer service and keeping the customer informed on how transaction issues can be solved should these arise.
Below are several best practices for customer service that a merchant should follow for optimal chargeback prevention. These are some steps that a merchant can take to improve customer service in a big way.
1. The company can give a great customer service website experience as early on its product page by providing the following on the product pages.
- High-quality photos must be shown to accurately portray the product and to allow the shoppers to zoom in to see the specifics of the product shown.
- A detailed product description must also be posted to give details about the item including the size and the materials used.
- Return policy must be shown for the shoppers to know if the item or product is returnable or not. A link of the detailed return policy information must also be displayed as well as the customer service contact details in the event of any issues with the items or products purchased.
- The company must be able to display also the estimated shipping date as well as the shipping process of the items.
2. The site must also set up a contact page link in each page of its website to make it easier for shoppers and customers to contact them for their questions. Contact details of the business must be easily found on the company’s website including telephone number, email address of customer support, and other means of communication. The following must be displayed on the contact page.
- The Customer Service Telephone number and email address
- Days and hours when the customer service is available to answer questions or provide information.
- Link for live chat support as well as chat in social media pages like Facebook and direct message on Twitter for real-time assistance.
- A link for Order Inquiry where customers can update or check the status of their order.
- A feedback link where the customer can offer comments and suggestions based on their experience to improve the services provided by the company.
3. The merchant must also be able to respond quickly to all retrieval request of customers and filed chargeback. If the company doesn’t respond to the dispute in the allotted time the bank will process the chargeback filed by the customer without further question. It will also help to have a live customer support system on all channels like phone, email, live chat as well as chat in social media pages like Facebook and direct message in twitter where customers can raise all their queries, grievances and refund inquiries. As an additional rule, phone calls must be answered within 3 rings or less. Otherwise, customers who are trying to reach the business will think that no one is taking the phone calls. Email responses must also be done within the hour of receiving the email message. The live chat support should be available 24/7.
4. Proper communication with the shopper or customer is essential. There must be an order confirmation email to be sent to the customers immediately after the purchase is made to remind them of their purchase transaction. All relevant details must be included as well as the contact information of the customer support should the customer want to reach out for inquiries and other questions. Any issues or delays in shipping must be advised to the customer immediately as well as for back-ordered items. It is essential to communicate with customers because if the customers know the status of their orders, they are less likely to dispute a charge.
5. The billing descriptor that the customer sees on their monthly billing statement must be clear and must also include a contact number and the DBA or Doing Business As the name so the customers can easily recognize where the credit card transaction has been made and confusion will be avoided.
6. Issues raise by the customer regarding the item that they have purchased must be follow up until after the issue has been resolved to ensure the customer was satisfied with both the item and services they have received.
7. Avoid having lengthy return process to avoid customers choosing to file the chargeback thru bank.
8. Ensure that the customer service staffs are all properly trained and know all the details of the company and its products or services.
It is best to determine the best way to handle any given situation to ensure that every customer receives the best attention possible. Some customers will be very angry while others just want to voice their concerns and have someone to listen to their grievances. It is important to be able to give the customer what they really need.
Customer service can make or break a business. Improvement in customer service efforts and watch the number of chargeback decline. In the end, customer service impacts the profitability of a business because when done right, it can turn customers to loyal customers who keep on repeat purchases.
The Merchant Account Processing Experience — More Than Just Getting Merchants Started
Give us a call at +44 800 776 5988 or get in touch with us through our website. Prospective merchants and partners are directly connected to our team of merchant account processing specialists, committed to earning approvals and matching merchants with the best acquiring banks for their business.
We actually prefer having an initial conversation to discuss your options.