Tips on How to Limit Chargebacks

Chargebacks are an unfortunate part of accepting credit cards for the payment of goods or services. They occur when a customer contacts his credit card company and disputes a charge on his statement. A customer may initiate the chargeback process for a number of reasons, but the most common ones are: not recognizing the business name on their statement, the quality of the goods or services was not as promised or was never received, the wrong amount was charged to the credit card, credit card fraud occurred, or the transaction was not authorized.

While it is not possible to completely eliminate all chargebacks, a savvy merchant can take several steps to greatly reduce their occurrence.

Ensure That Your DBA Name Matches Your Company’s Name
A DBA (“doing business as”) name is the name associated with your merchant services account and this is what shows up on a customer’s credit card statement. If your DBA name differs from the name of your business, it can be very confusing for customers. If a customer buys something at Store A, but his credit card statement shows a transaction for Store B, he is likely to call his credit card company to dispute the charge. To eliminate any confusion it is best for your DBA name to match the name that customers associate with your store.

Get a Signature
When processing a credit card, it is best to always run the card through the payment terminal. Manually keying in information can often lead to mistakes, which may result in chargebacks. It is important for a brick-and-mortar business to have their customers sign each credit card receipt. This will serve as proof that the customer made and authorized the purchase. If the charge is disputed, having a signed credit card receipt can prove to be very useful.

Use an Address Verification System
An increasing number of businesses are operating online, so it is impossible to get a customer’s signature on a credit card purchase. A solution to this problem is to use an address verification system for online payments. This system will require customers to provide the address associated with the billing address associated with their credit card, which can greatly reduce credit card fraud on the Internet.