Accepting credit cards as payment in your business transactions helps you increase your revenue, your customer base and improve productivity.
Customers or cardholders get credit cards from banks, which are known as “issuing banks.” A chargeback, also referred to as a reversal, can be described as customer protection provided by the issuing banks. It enables cardholders to file a complaint when there is a fraudulent transaction on their statement. The cardholder files a dispute, and the issuing bank starts investigating into the matter.
Of course, businesses benefit from being able to accept credit card payments. However, chargebacks can lead to major problems. If a customer disputes a transaction for this or that reason, you’ll have to go through a rather complicated process, which will result in lost sales and cost you unnecessary fees.
It’s important to know the most common reasons why a merchant may receive a chargeback. Being aware of these circumstances, you’ll be able to avoid them successfully. Here are the main reasons for chargebacks to occur:
- Fraudulent Transactions ─ When the credit card is used without the authorization and permission of the cardholder.
- Credit Not Processed ─ When the cardholder doesn’t receive the item he/she expectedand requests to get their money back but says credit was not posted to his/her account.
- Item Not Received ─ When the customer doesn’t receive the item which he/she has paid for by credit card.
- Technical Problems ─ Many chargeback requests are caused by technical problems associated with the payment processes.
Chargeback Insurance Providers
Investing in chargeback insurance is vital for all merchants, especially high risk ones.If you have difficulty finding a chargeback insurance provider, turn to eMerchantBroker, the #1high risk merchant account provider in the US. EMB is one of the top chargeback insurance providers in the US. You don’t necessarily have to open a merchant account with EMB.
Credit card chargeback insurance from eMerchantBrokernot only protects your business but also your customer’s personal information. Thanks to chargeback insurance, you’ll be able to distinguish between authentic and fraudulent charges.Eventually, a low chargeback rate can help you maintain your low prices.
The best thing to remember is that you should avoid chargebacks at all costs. First, it’s important to be an honest seller. Honesty guarantees fewer problems, unless you get them from your customers. Make sure to provide your items at their very best, and deliver the best customer service you can. As a result, your customers will avoid complaining about the transaction to their issuing bank. Next, make sure to prevent fraudulent transactions and unauthorized use of cards.