In this fast-paced world, it becomes imperative for a small business to be flexible in order to keep up with the constantly evolving technology and accommodate customer demands as well. The key responsibility of a business is to be always aware of the customers’ needs and requirements. And the one thing that customers look for in any business is the variety of options available. Whether it is among products or payments, customers enjoy having options to choose from.
Hence it becomes a priority for a merchant to employ the best payment methods available to match your customer preferences. Accepting credit cards as a mode of payment is one of the most important decision that a small business has to make.
And while there are many advantages to accepting credit cards, something that a merchant should be wary of is its one major drawback – Chargebacks!
What are chargebacks? A chargeback occurs when the merchant charges credit card for transaction but the cardholder or customer disputes it. While chargebacks are genuine, some are caused with a malicious intent to rob the business.
Regardless of whether you are a small business or operate a huge firm, chargebacks can be equally daunting for both costing businesses over $4 billion annually.
Excessive chargebacks can lead to shut down of your merchant account and tarnish your reputation among credit card processors.
But do not worry! There are ways to recognize, prevent and fight chargebacks to ensure smooth transactions for your small business.
How to prevent chargebacks for small businesses?
- Check whether your merchant account provider offers chargeback protection tools to analyze, manage and prevent chargebacks.
- Integrate a 3D secure payment gateway with your merchant account which gives an additional layer of protection during credit or debit card transactions.
- Validate the cardholders’ identity and accept credit cards from authorized customers only.
- Avoid misrepresentation and false advertising of products and services. Be transparent about what you sell.
- Employ a strict & clear refund policy.
- Provide an excellent customer service. Respond quickly to complaints or queries.
While a merchant cannot completely avoid chargebacks, they sure can implement necessary measures to reduce it.