The chargeback is a process that exists primarily for consumer protection against unwanted or undesirable transactions. A chargeback is the return of funds to a consumer, forcibly initiated by the consumer’s issuing bank or credit source. There are numerous reasons for individuals to initiate the chargeback process but the bottom line is these greatly affect the online vendor. This process is tracked by financial institutions and directly affects the ability of the vendor to accept credit cards and debit cards online.
Most major credit card issuers maintain an allowable ratio approximately 1% of total transaction sales. Although this may seem redundant, going over the allowable limit can greatly affect the vendors’ ability to maintain their processing ability. When the threshold is reached, the vendor may immediately have their accounts closed by their online payment service provider. There are ways to circumvent chargebacks and to maintain a respectable chargeback ratio.
One of the challenges in operating a successful business globally in today’s economy is the ability to provide a high quality level of customer support. Providing a resource for customers to resolve any questions or issues will go a lot further towards satisfaction with the customer than the highly technical automated computer systems. Customer support is one of the foundations that the most successful e-businesses are structured around.
The next key to preventing most chargebacks is communication. Keep the lines of communication open between you and your customer. There is no faster way to convince a customer that they are not appreciated than closing off any communications links between the vendor and the customer. Simply talking to the customer can greatly reduce the number of chargebacks and increase future sales. Letting the customers know that the appreciation is there also increases the recognition that a vendor receives from the online community.
One tool that should be offered by a comprehensive e-commerce service provider is called a chargeback protection plan. This plan is specifically designed to offer full protection against the dreaded Chargeback. Today’s e-commerce platform providers are so confident in their fraud prevention services, that they are willing to take fraudulent chargeback costs upon themselves. With this plan vendors receive a money-back guarantee for the loss of sales due to fraudulent chargebacks that are inflicted upon the vendor.
Combining the technology along with expert teams to prevent online fraud narrows the possibilities of receiving chargebacks to areas such as service, product and customer service.
The long and short of it chargeback’s can rapidly kill your online business, whether you are selling music, books locally or selling software globally, keep these tips in mind when you are looking for chargeback protection and a solid e-commerce solution provider.
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