Chargebacks are a growing problem and there are hundreds of merchants and service providers who have faced or are facing the nightmare of receiving repeated chargebacks. Ideally, a chargeback can only take place when a customer chooses to call up their credit card company and tell them the following:

 

* The customer doesn’t recognize the transaction and assumes it to be fraudulent.

* The customer is disappointed with the service provided to them or if the product delivered is not in accordance with what was promised.

* The product or services were never delivered to the customer

 

Basically, when a customer applies for a chargeback then it means that the transaction of sale will be completely reversed. This is definitely not good news for the merchant as they will not only lose the sale but will also a fee for the amount that was reversed. But the worst part is that too many chargebacks can blacklist the merchant and they will lose their merchant account as well. It is difficult to completely eliminate chargebacks but there are 5 ways by which you can reduce chargebacks and they are:

 

Inform your customer regarding what they will find on their credit card statement. This includes every detail of the purchase that was made using a credit card. This will go a long way in effectively reducing chargebacks on the account of the customer thinking it to be a fraudulent transaction.

Scrutinize the purchases: Merchants working over e-commerce portals like ebay will get purchase orders from across the world. If you scrutinize each of the purchase orders then it will help you in reducing chargebacks especially when customers say that the product/service was not delivered.

 

Shipping: If you have to ship items to a customer then ensure that you get a signature on delivery of the product.

Legitimacy of an order placed: If you have any doubts regarding a particular order then call up the credit card company before going ahead with processing the order.

 

Problem customers: You just can’t get away from this one! There will always be one problem customer and this will be a difficult situation to handle. The best way out it to hang in there and convince the customer.