Chargebacks—reimbursements to a consumer by a retailer, typically as a result of fraudulent card activity—are something all merchants should be aware of, as they could negatively impact a business’ bottom line and reputation among consumers. While it’s near-impossible to prevent every chargeback from occurring, since some are cases of chargeback and/or friendly fraud, there are ways to decrease the number of claims made.
Here are just few to consider:
Provide Excellent Customer Service
In Glance’s Counting the Customer: The Complete Guide to Dynamite Customer Care, the software company references a very telling statistic: “It takes 12 positive experiences to make up for one unresolved negative experience.” This exemplifies just how important customer service is to every business.
The guide goes on to say, “Resolution is key: 70 percent of unhappy customers whose issues were resolved in their favor said they would be willing to come back.”
As a result, when you train your employees to provide high-quality customer service, this includes addressing any issues that arise as soon as they hear about it. If a customer contacts you about a questionable purchase, for example, it’s best to immediately respond to those concerns and offer a refund. While this may cost your business money, it’s less expensive than going through the entire chargeback process, which involves paying a chargeback fee to your credit card processor, regardless of the case’s outcome.
Adopt EMV Technology
The point of the EMV liability shift in the United States, which took place in late 2015, was to help protect consumer card information when making in-store purchases. While compliance isn't mandated by law, studies suggest the technology is effective.
As international digital security business Gemalto shares, merchants in several countries have experienced a decrease in fraudulent transactions after implementing EMV. For instance, the company states, the United Kingdom “saw overall card fraud reduced by a third after the implementation EMV in 2004.” Plus, counterfeit card fraud in France “nearly disappeared” after the country adopted EMV the following year.
In the two years since the United States began officially migrating to EMV technology, Gemalto references key data provided by Visa in March 2017, highlighting that “2.02 million US merchants accept EMV-capable cards, up 98 percent since the previous year. And for those merchants that accept EMV cards, counterfeit fraud losses decreased 58 percent in December 2016 compared to December 2015.”
Ask Your Credit Card Processor For More Information
Although merchants should understand the importance of card security and how to prevent chargebacks, they aren’t expected to be experts on the subject—that’s their credit card processor’s job.
Consequently, if you’re interested in learning more about consumer data protection, you should contact your credit card processor for additional information and the latest news in the industry. This keeps you up-to-date and gives you some ideas on how to better secure your organization’s confidential information.
Further, it’s something you can inform your customers about to exemplify how you're proactive in finding ways to reduce counterfeit card fraud from occurring at your business, and thus, preventing chargebacks.
Find out more about chargebacks and how they could affect your business.