Common Chargeback Myths
All entrepreneurs dread chargeback situations. After all, it doesn’t only mean losing money from what could have been a sale, but high chargeback rates can get your merchant account canceled and put the credibility of a business at risk. While chargebacks do happen and you have to deal with them at some point, there are many chargeback myths you shouldn’t believe.
As payment processing experts that offer chargeback prevention tips, we are debunking 2 common chargeback myths to help you more effectively address these situations.
Chargeback Myth #1: Disputing a chargeback will destroy your relationship with customers.
As a business, it’s better to handle a refund rather than a chargeback; however, many people don’t know the difference between a chargeback and a refund. Thus, some customers may file a chargeback request simply because they don’t know any better than because they are not satisfied with the merchant.
Ideally, a customer will try to resolve an issue with a merchant before requesting a refund or opting to go with the chargeback option. If the customer is dissatisfied with the merchant’s solution and therefore requests a chargeback, there’s a good chance that the relationship has already been tainted.
When a customer files a chargeback against your business, you will be given the chance to dispute it by proving that the transaction was legitimate. For a lot of businesses, going through this process means destroying the relationships they built with those customers, which may not be worth winning that dispute. This doesn’t have to be the case, though; not to mention the fact that letting an issue slide will only make matters worse for your business.
By filing for a dispute, you have the opportunity to prove the legitimacy of your transaction or correct an innocent merchant error. Additionally, you could use this as an opportunity to reach out to customers and let them know that there are other options to request a refund or to help address whatever concerns they have. Customers appreciate it when merchants show that they care.
Chargeback Myth #2: You can never win chargeback disputes.
A lot of entrepreneurs think that they can never win a chargeback dispute since merchant providers and banks will likely agree with the customer.
The truth is that financial institutions usually investigate the claim to determine whether it’s a case of friendly fraud or figure out whether to favor the customer or the merchant. As a merchant, you have the opportunity to dispute the chargeback and prove the legitimacy of the transaction. Just make sure to know how long a merchant has to submit a chargeback dispute so you don’t run into additional issues with this process.
There are many reasons a chargeback can be denied so don’t lose hope that you can win your case!
Debunking Chargeback Myths with First Card Payments
You can put certain measures in place and find the right payment processing company to reduce the risk of getting a chargeback, but it will happen at some point and you need to know how to deal with it properly. With a successful chargeback strategy and a reliable high-risk merchant provider, you’ll maintain a low chargeback rate and a high degree of credibility among businesses.
As long as you can tell the chargeback myths from reality, you’ll be confident in taking on the chargebacks that come your way. Contact us today to learn a few chargeback prevention tips as well as the merchant services offered at First Card Payments.