Everything you need to know about holiday spending
The holiday season is one of the busiest and most profitable times of year for small businesses—but it also comes with an increase in fraud and payment disputes.
Infact 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 practical ways to reduce disputes, prevent fraud, and protect your revenue.
Use a recognizable business name on card statements
Using a different business name can cause customer confusion and lead to unnecessary disputes.
Make sure your billing descriptor clearly matches your brand name. Even small inconsistencies can lead to confusion and unnecessary chargebacks.
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.
Detailed descriptions, sizing information, and clear imagery reduce the likelihood of customer dissatisfaction—one of the top drivers of disputes.
For example, include FAQs or “what’s included” sections to minimize ambiguity.
Ensure your refund and return policies are clear
If customers can’t easily return an item or get help, they’re more likely to go straight to their bank.
- Clearly display policies on product pages and checkout
- Keep them simple and easy to understand
- Offer straightforward refund options when possible
Having a visible, fair policy can help redirect disputes back to you instead of the card issuer.
Use delivery tracking
Shipping issues are a leading cause of disputes—especially during the busy holiday rush. Use tracking numbers, delivery notifications and Signature confirmations (for higher-value items)
This gives you proof of delivery if a customer claims they didn’t receive their order.
Use the most up-to-date payment 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 Visa Secure 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.
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