17 Ways To Reduce Chargebacks In Your Business

For merchants, chargebacks can be costly for a business. You lose both Vending Machine Stock dollar amount of How Much Money To Invest In Vending Machine Business transaction Home Soda Vending Machine the Antique Cigarette Machine Vending merchandise. You also incur Vending Machine Controller Circuit own internal costs for processing the chargeback which can range from $10 - $35 per chargeback. If chargebacks become a regular occurrence for your business, you could seriously risk losing your merchant account.

A chargeback reverses a sales transaction in three Origami Vending Machine First, the card issuer subtracts the transaction dollar amount from the cardholder's credit card account, receives a credit and is no longer financially responsible for the dollar amount of the transaction. Next, the card issuer debits the merchant bank for the dollar amount of the transaction. Lastly, the merchant bank deducts the transaction dollar amount from the merchant's account. The merchant loses the dollar amount of the transaction.

Let's say for example, you sold your product to 5 Toilet Paper Vending Machine online or offline in two days for $300 each. A month goes by and after two months, you receive an email from your credit card processor saying that you received 3 chargeback's, reason FRAUD. You just received the money transferred to your bank checking account from the credit card processor and now you have to pay Medicine Vending Machine all back in the following fees:

1. Original fee: $300 x 3 = $900

2. Transaction fee: 5% of $300) x 3 = $45.

3. Chargeback Penalty fee: $25 x 3 = $75 TOTAL: $1020

To avoid that from happening to you, implement the following 17 strategies in your business to reduce chargebacks against your merchant account:

1. Purchase merchant chargeback insurance. Chargeback insurance can provide protection against cardholder fraud on "Card Not Present" credit card transactions when: A lost or stolen credit card is used before the card owner detects it is missing; Identity theft takes place and is assumed by thieves; A valid transaction has been made by the real card owner, but thieves hack into a site's customer service screen to Vending Machine School access to that customer's Drink Coca Cola In Bottles Metal Sign Vending Machine necessary to have products shipped directly to them instead of the real customer. It will reimburse the merchant for the cost of the stolen product or services, the loss of profit, and the charge back processing cost.

2. Refunds. Whenever a claim for a refund is made, and it has any merit - give the customer the refund. This will significantly reduce chargebacks.

3. Make sure your system uses the Address Verification System. This system is designed for fraud protection. It compares the billing information provided to the address and zip code on file at the issuing bank.

4. Verify CVC2 and CVV2. VISA reported that making Atm Vending Machine supply the CVC2 and CVV2 verification numbers (the 3 digits on the back of the credit card) reduced charge backs by 26%.

5. A 30 day money back guarantee or return policy will significantly minimize disputes and charge backs.

6. Ask to see a customer's id when accepting a credit card. When the customer presents the card to you, Wiring Diagram Vending Machine it a habit to look at the expiry date and ask for id.

7. Describe your business clearly and make sure your customers know what business name will appear on their credit card statement. For example, if you have an online business, on the payment form it should read: "This charge will appear as ABC Widgets, Inc."

8. Obtain cardholder Cold Vending Machine Card present transactions require the cardholder's signature. Train your employees not to give the customer their credit card or goods before the receipt is signed.

9. Don't Vending Machine Contract transactions before you ship the merchandise. If a customer reviews their credit card statement and notices a transaction for product they have yet to receive, in most cases they will dispute it.

10. Keep your customers informed. If merchandise to be provided to the cardholder will be delayed, advise the customer in writing of the delay and the new delivery date. You may even supply the tracking number.

11. Check the IP Address. If you are an online merchant, it is very important that each order processed through your website keeps track of the IP address of the person placing the order. The IP address is a unique network identification issued by an Internet Service Provider.

12. If your business delivers products, use a carrier that requires a signature on delivery, and allows you to have a copy of the signature. Keep it for your records in case of a chargeback dispute.

13. Be wary of International orders. These are very high risk transactions because there is no system in place for verifying international orders. The Address Verification Service is limited to credit card transactions within the United States.

14. Deposit sales receipts as soon as possible. 1 - 5 days is standard. A chargeback can occur due to a late deposit.

15. Be careful not to deposit duplicate Cash Vending Machine Do not run the same transaction through the POS terminal more than once or deposit the same transaction more than once.

16. For websites, make sure you provide a toll free phone number for customers to call, so they can hopefully resolve problems prior to instituting a dispute via the card company. On your website you should create a 'frequently asked questions' section to further clarify issues that might otherwise lead to a complaint.

17. When selling over the Internet, place a warning on your transaction webpage stating that your site employs safeguards against fraud.

Most chargebacks occur because of fraudulent transactions. The 17 strategies are ideal solutions for protecting your business and customers from fraud. Most importantly they will help merchants to reduce chargebacks from occurring.

Melvin Pritchett is the creator of Merchant Ideas, a website dedicated to Vending Machine Moving Equipment you up-to-date with the latest tips and ideas for credit card processing, and merchant account services. His focus is built around educating business owners on the process of accepting credit cards and online marketing by teaching practical ideas for a competitive marketplace.

For more information, visit Pritchett's site at http://www.merchantideas.com or sign up for his Important Merchant Tips at http://www.importantmerchanttips.com