Businesses that accept credit cards may sometimes face chargebacks. Chargebacks were initiated by the Fair Credit and Billing Act of 1974, in order to prevent customers from unfair credit card transactions. A chargeback occurs when credit is reversed to a customer’s card to dispute a purchase. It could be a true chargeback or fraud.
Fraudulent transactions and chargebacks are usually made by a third-party and have a negative impact on small businesses. According to chargeback911, around 100 chargebacks occur each month with an average transaction value of $100. This statistic is likely to increase with time due to the rise in online businesses and cashless payments.
To keep you safe and up-to-date with the recent payment methods, here are some steps that businesses can take to prevent chargebacks and fraudulent transactions.
Secure Processing System:
Each credit card processing system has different protocols when making a transaction. Choose a reliable payment system to ensure safety from friendly frauds.
A good credit card processing system will include updated security features and TAA compliance. The payment system should be certified by relevant organizations such as the PCI security standards council to monitor threats and secure sensitive data.
Safe CNP Transaction:
Card-Not-Present (CNP) transaction is an online credit transaction and requires a secure online platform. Online transactions are more prone to fraud. To avoid chargebacks on an online purchase, select a payment processor that comes with fraud detection and address verification services (AVS).
An AVS will help verify your customers’ address by matching it with the one provided to the credit card company. Keep a record of sales receipts and other important documentation to deal with fraud.
Prompt Customer Service:
Businesses are informed about a chargeback through notifications from the payment processor. Address these notifications immediately for prompt response and early detection of disputes. Good customer service can save you from fraudulent chargebacks. In case of dissatisfaction, businesses can contact customers directly to resolve any issue upon receiving chargeback notification.
The Right Way to Fight Backs:
Fighting every single chargeback can be troublesome for your business. A low-budget chargeback can be avoided to maintain your company’s reputation and budget. Fighting chargeback costs an additional fee. Therefore, fight a case with a strong chance of winning. In case of a minimal chargeback, refund the customer.
UIC World provides secure payment solutions for your business. Our expert engineers have designed an innovative and customized payment system according to the needs of your business. Call us now at +510-438-6799.