If you have drifted towards merchant services to manage your cash flow, attract more customers, boost the sales, stay in business 24/7, avoid bad checks and accept payments through credit card processing, you must be familiar with the deadly term, ‘chargeback.’ Though it shows its wrath mostly to the high risk businesses, low and medium risk businesses are also under the spotlight if not careful towards the actions.
Even if you have a reliable merchant service provider as your backbone, you must keep yourself updated with chargebacks.
What is a Chargeback?
Chargebacks were created with an aim to protect the customers from frauds & scams. They take place when a disappointed user disputes a particular charge to his/her account. If chargeback is issued for a card that’s either lost or stolen, it is the bank that issues the reversal of funds. Having said that, it is the business that is held responsible for the entire cost of the chargeback.
In case the business is not EMV complaint or does not have a chip reader, it is responsible for the chargeback liability. However, if it is EMV complaint, liability shifts over to the cardholder.
Chargeback process takes weeks to complete. During this time, money from the transaction is held by the bank. The bank asks purchase proof from the merchant and uses it to make ruling on the chargeback.
How to Stay Safe from Chargebacks?
There are certain ways to keep away from chargebacks or refrain from excess penalties. Want to know them? Check out the below given points:
You must abide by the procedure of credit card processing
The processing company partnered with, must have robust standards of security and clear payment descriptors
If you offer services and not products, always have a contract that explains the purpose of the payment, reduces chances of confusion regarding delivery & payment
Make sure to offer friendly customer service and ask your customers to fix the issues with you before moving to the banks
Train your employees to check for frauds, as doing this will help to stay safe from chargebacks before any consequences happen
Be Wise When Partnering with Service Providers
As there are many providers, search for best merchant services is not as easy as you think. However, you can get the best assistance and reap maximum benefits by taking out enough time and gathering as much information as possible about your service providing company. When everything seems favorable for your business, collaborate then & there.