Chargebacks are part of the course with Merchant Accounts. But if you lose control over them and they begin to occur too frequently, they can be immensely damaging to your business’ income and forecasts.
There are a variety of reasons why a chargeback may be requested, some preventable and some not. The most common are:
The customer is unhappy with the product received
This can happen with Retail Merchant Accounts, but it is more common with IMA and MOTO Merchant Accounts, where the customer has not previously physically seen the goods. Dependent upon your terms and conditions, you will have to issue a refund.
Again, this is a historical problem with IMAs. If a customer has had their card details replicated, a chargeback request lies in the hands of the issuing bank.
Incorrect amount charged
It can happen, and when it does a chargeback request will be issued.
This may seem unavoidable, but there are two steps you can take to make chargeback requests less frequent:
Ensure your business name is consistent
This is the easiest and most straightforward action to take. Make sure that the business name on customer statements is the same as the recognised company name. If it’s not, you may be subjected to accidental chargeback requests.
Always get authorisation
Sometimes it’s the obvious elements that are ignored! Get authorisation from every customer for every transaction.