If you’re running a business, you’d know that chargebacks are no less than a nightmare. However, if you know the causes, you will know how to improve the processing capabilities of online payment. There are several times when false chargebacks may occur and hamper the safety online payment.
We live in an era of cyber theft and identity theft and online transactions are often hijacked by scammers. This can affect the experience of the customers and make them feel insecure about any kind of online transactions. fraudulent chargeback is a disturbing for any business. Check out how to deal with it.
Step #1: Recognize the source of chargebacks
Whenever a cardholder or your client files a chargeback, the issuer will give a reason code for that transaction. Theoretically, these reason codes the reason behind the transaction getting reversed. With the growth of e-commerce fraud, reason codes have become unreliable. Chargebacks are usually a consequence of 3 things, friendly fraud, merchant error and criminal fraud. If you have to fight chargebacks, merchants should know which of these is a reason behind chargebacks.
Step #2: Involve in systematic representment
It may be surprising enough but it is true that 88% of chargebacks are a reason of friendly fraud. Majority of the chargebacks are a result of dishonesty on the party of cardholders. Though you can’t dispute chargebacks that result from criminal fraud and merchant error, you can certainly fight chargebacks that stem from friendly fraud. No matter you sell products like crossbow broadheads or you engage in laptop sale, you’ll still be at the risk of facing these.
Step #3: Prevent chargebacks in future
You might not be able to dispute chargebacks that result from criminal fraud or merchant error but there are certainly steps to prevent such things from happening in future. It is seen that mostly the minor errors have the harshest consequences and 45% of chargebacks are caused by mistakes that can be prevented in future. Hence, you have to take steps to prevent such chargebacks in future.
Step #4: Seek professional help
Though it seems intuitive that in-house management would be the most responsive and direct solution, yet this isn’t the case. Chargeback prevention and management is rather too inefficient. In-house teams usually don’t have the skill or expertise to maintain frequent rule changes of the payment industry. Hence, they lose the ability to manage chargeback effectively. This is when you need professional and expert help. There are companies that offer outsourced and on-demand solutions.
Step #5: Watch out for hidden problems
Are there any underlying issues that are causing disputes in transactions? If yes, the solutions are all temporary. Hence, the best way of solving and identifying these issues from their root is by analyzing your prevention alert and chargeback information. Watch out for anomalies and patterns. If there are constant issues with your payments or financial statements, then you may want to call for professional forensic accounting services from firms such as Eide Bailly (visit the website to understand their services better) that can examine past transactions, identify any abnormalities, and help you resolve them, among other things.
Therefore, if you’re wondering about the ways in which you can put an end to fraudulent chargebacks, take into account all the above mentioned information. Seek help of professionals whenever needed.