No merchant wants to see a chargeback on their accounts. Unfortunately, chargebacks are a frequent occurrence for businesses in high-risk industries. The good news is that you can take some simple steps to reduce chargebacks for your high-risk merchant services account.
What is a Chargeback?
A chargeback is when a customer makes a dispute regarding a payment and the charge gets returned to their payment card. Essentially, chargebacks result in lost money for those with merchant services, as they frequently already delivered the product or service to the client.
Chargebacks cause numerous frustrations for business owners, starting with their cost. The cost of a chargeback can add up, and your high-risk payment processing provider may even charge you a fee for chargebacks. This means that a chargeback will directly affect your bottom line. In some cases, payment processors may even close your merchant account if you have too many chargebacks.
In addition to costing you money, chargebacks can waste your time. With a chargeback, you spent time providing a product or service without any reward for your efforts. You may also need to spend time convincing your high-risk payment processing provider that you are still worth having as a client.
Remember that high-risk merchant accounts are a method of providing a merchant account to companies in an industry associated with higher risk. Businesses tend to get the label of a high-risk merchant if they have high chargeback rates, many transactions without the card present, poor credit, or are in particular industries. If you fit this description, you should be aware of the terms of your merchant services contract and work to mitigate the negative effects that chargebacks can have on your account standing as well as save you time in the long run.
Review Your Billing Descriptor
The first thing to do is take a look at your billing descriptor, meaning how your company appears on the credit card bill. You want your customers to recognize your business when they look at the bill. Otherwise, they may not know where they spent the money and dispute the charge, despite knowing they did business with you.
To ensure your clients can recognize your billing descriptor, it is best practice to include your company name as well as a phone number at which customers may reach you.
Improve Customer Service
Next, any high-risk merchant should do what they can to boost customer service. This is key as you want customers to be able to easily contact you in the case of questions regarding their bills.
Your customer service should include training for employees on quickly responding to any inquiries. Employees should respond as quickly as they can to clarify any concerns of the customer, as this will prevent a dispute or chargeback from occurring. Customer service improvement should also include training for employees to confirm that any card used in person matches the person’s ID.
Use Fraud Protection and Chargeback Mitigation Tools
To mitigate chargebacks, you should also use various fraud protection tools as part of your high-risk payment processing. This includes blocking transactions that come from suspicious IPs in the case of online retailers. It also means verifying the identity of customers, whether the transaction takes place in person or online.
To further reduce the risk of a chargeback, consider using various chargeback mitigation tools. A quick search will show you tools of varying quality that will prevent chargebacks by challenging transaction disputes that are not legitimate.
Have a Clear Return Policy
The return policy for your business should be clear and easy to understand. The policy should be available in the store, online, and printed on your receipts as well for the sake of transparency. When you have an explicit return policy, it makes it difficult for customers to request chargebacks because you have done your due diligence by providing them with the policy. If customers have a clear path for initiating a merchandise return, they are also less likely to simply request a chargeback.
Choose the Right High-Risk Merchant Services Provider
Even your choice of high-risk payment processing providers will affect your ability to avoid chargebacks. Opt for a merchant services provider that specializes in working with high-risk payment processing. The provider should also offer excellent customer service and support. These factors indicate that the provider will be comfortable with high-risk payment processing and have a willingness to work with you.
Go a step beyond and look for a provider that will also work with you to reduce your chargeback rate via built-in or available tools. You are more likely to find these tools with providers offering a high-risk merchant account.
Contact BankCard Services Today
To get on track to avoid chargebacks, consider BankCard Services. We specialize in high-risk merchant accounts and offer chargeback mitigation tools to help you reduce lost money and time from chargebacks.
Contact BankCard Services to learn more about our high-risk merchant accounts and our tools to reduce chargebacks.