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Fearlessly Accepting Credit Cards: Avoiding and Managing Chargebacks

If you accept credit card payments in your business, one of the things that you should know about is the issue of chargebacks. These can be frustrating to deal with, but there are steps you can take to reduce the chances of facing too many of them.

What Are Chargebacks?

Chargebacks, also called claw-backs, are when customers seek to get a credit card transaction refunded. A chargeback could be due to a fraudulent transaction, or the customer may feel that they have not received the product or service that they paid for.

Section 75 of the Consumer Credit Act provides protection for credit card purchases from £100 to £30,000. Consumers therefore know that they will be able to make a claim should they receive goods or services that are faulty, inadequate or do not materialise.

Credit Cards Avoiding and Managing Chargebacks

The Chargeback Process

If a customer wants to get their money back after using their credit card to buy a product or service from you, they can contact the card issuer to begin the chargeback process.

The card issuer will then research the claim, and if it looks like they customer has a case, they will begin the process. The acquiring bank will send you a Request for Information (RFI), and you must respond to this because if you ignore it you will automatically have to pay.

Once you send the information back, the card issuer will look into it, and it will then decide whether to proceed with the chargeback. If you have to pay the chargeback, you will lose the money that was spent on the card, and you will usually have to pay an admin fee on top.

Make an Effort to Avoid Chargebacks

Some chargebacks are unfair, and the customer may be trying to get away with getting something for free. Or they may simply forget what they ordered, or they may not want to go to the hassle of getting a refund. So even if you are doing everything right, you can still be affected by chargebacks.

However, many chargebacks involve problems with the product or service purchased by the customer. You can therefore reduce the likelihood of having to deal with chargebacks by ensuring you always provide the highest quality possible. You should also make an effort to provide excellent customer service so that fewer customers are likely to raise a dispute.

Technical problems could also be responsible for chargebacks, as well as processing errors. For this reason it is a good idea to choose your payment processor with care to reduce the chances of something going wrong.

How to Choose Your Credit Card Processor

There are many credit card processing companies to choose from, so it is a good idea to compare them in detail before making your choice. Analyse their prices, customer support, reputation and more to help you decide. If you want to rent a credit card machine, look at a selection of credit card machine rental suppliers and compare the costs involved.

Also make sure the company has good fraud-prevention measures in place to reduce the risk of fraudulent transactions occurring.

Chargebacks: Know What They Involve

Speak to your credit card processor about chargebacks to find out about their process for dealing with them, and make an effort to stay up to date with the latest anti-fraud measures. But most of all, focus on providing a high-quality service and excellent customer support to reduce the chances of chargebacks occurring in the first place.

William Steele’s work involves providing varied retail solutions. He likes to share his insights on topics like point of sale systems with an online audience. He is a regular writer for a variety of relevant websites.

{ 1 comment… add one }
  • Hassan Khan

    November 26, 2015, 11:59 am

    Hello there.

    Thanks for letting us know about credit card charge backs.Is there any way in master card? because when i have a dollars and want to exchange i feel insecure coz of the some exchanger. if there is any way in master card (payoneer). I would love to know about it.


    Best regards.

    Hassan K.


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