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Here’s how to minimize the high cost of credit card disputes


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Did you know that every dollar of fraud-related disputes or chargebacks costs businesses like yours an average of $2.94? That’s according to Chase and a recent report from LexisNexis Risk Solutions.
 
Not only that, fees related to each dispute can range between $25 to $100 per transaction. It’s no wonder that up to 42% of businesses challenge less than half of all disputes and 14% don’t bother to fight them at all. From customers initiating a dispute to banks withdrawing funds from the business to business owners challenging the dispute to banks validating it, the chances of a business winning a dispute are simply too low and the process is too time-consuming and expensive.

So how can you reduce disputes and save your business money and hassles?
 
Here are six suggestions:

  • Use a recognizable name on card statements. Using a different business name can cause customer confusion and lead to unnecessary disputes.

  • Use accurate product descriptions. The more your customer knows about what they’re buying the less likely they’ll be disappointed and use the dispute process to ask for a refund.

  • Ensure your refund and return policies are clear. Clearly display them in-store and on your website and always provide customers with an easy way to return merchandise for a full credit.

  • Use delivery tracking. In particular, signature confirmation ensures you have proof your customer received what you sent them.

  • Use the most up-to-date card technology. Whether it’s chip-enabled or contactless tap-to-pay cards, these can reduce your liability for disputes – ask your payment processor about updating your terminals.

  • Use ID verification. Services like Verified by Visa® and Mastercard SecureCode® can help small businesses verify a card user’s legitimacy. You can also use address verification to match a cardholder’s address with their shipping address.

These strategies, as well as carefully documenting your entire sales process, may seem like a bit of a hassle. But the fact is they’re your protection from fraud and they can help reduce expensive and time-consuming card disputes. A Meridian Small Business Advisor is always here to provide you with the right answers, right away, on fraud or any other concerns related to your business – contact us anytime

Also checkout this infographic for more informationdownload infographic

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