Chargebacks can be a common problem for growing small businesses. When a customer disputes a charge, they are automatically returned the money by their financial institution. It’s your role as a business owner to fight for that money back. It’s very difficult to stop a customer from issuing a chargeback through their financial institution, but there are steps you can take to limit the chances of them taking this route to reverse the charges. In this article, we’ll outline five tips for preventing chargebacks.
- Use Your Business Name ClearlyWhen a customer doesn’t recognize the name of the company alongside the charge on their statement, they’re more likely to issue a chargeback. It’s important that you use your company name, as it appears on your website, when charging customers on their credit card. This will present your company in a more legitimate way and ensure fewer chargebacks over time.
- Provide Detailed Descriptions of Products and ServicesAnother common reason for a disputed charge is that the customer didn’t receive the product or service they thought they were buying. You can avoid this issue by explaining in clear detail the product or service you’re offering through your site. Include pictures and screenshots to further showcase the legitimate value of your product or service.
- Ensure Free Trials are Completely Without ChargeIt’s common for more unscrupulous businesses to begin charging their customers once a free trial is over. This can enrage customers and immediately cause them to issue a chargeback on their credit card. By simply explaining the free trial offer in detail and only charging customers once they opt-in to a payment plan at the end of their trial, you can secure loyal customers over the long-term.
- Bill Monthly Rather than AnnuallyA leading issue with billing annually is that customers have paid for a year’s worth of product or service, and they’ve yet to receive that item. This means they can contest charges throughout the year, leaving your company vulnerable to a full year’s worth of contested charges. If you bill monthly, after providing the customer their product or service for that month, you’re then more likely to build a business relationship with that customer and ensure the customer is happy with the value your business provided.
- Offer Complete RefundsIf a person isn’t happy with a product or service, they’re going to try to get their money back one way or another. As a business owner, you can be proactive on this issue by offering complete refunds within a certain time period. By clearly stating your refund policy on receipts, as well as in your FAQ on your website, you can reduce the number of chargebacks your company will receive.
Through effective use of the tips within this article, you can limit your business’s chargebacks and build a successful online company. To learn more on how to limit chargebacks, speak with our team today.