Tips for Preventing Chargebacks

In addition to chipping away at your profits, chargebacks can also translate into extra processing time and costs. That’s why it’s important that you carefully track and manage all chargebacks you receive and take steps to prevent them from happening in the future. Most chargebacks can be prevented by clearly communicating to your customers and by following best practices for processing transactions.

The more you know, the easier it will be to protect your business from easily-preventable chargebacks.

Here are some tips for how you can help avoid chargebacks and prevent them from negatively impacting your business:

  • Use a credit card terminal or mobile card reader that supports EMV chip cards
  • Insert or swipe the card whenever possible
  • Obtain a valid authorization on every transaction
  • Do not complete a transaction if the authorization request was declined
  • If you receive a “Call” response for an authorization, call the authorization center
  • If you must manually key the card number, make a manual imprint of the card using a manual imprinter with your merchant plate
  • Clearly communicate your return and refund policies to your customers
  • If a customer order is delayed, communicate the status to the cardholder
  • For card not present transactions, verify the cardholder’s address using the Address Verification Service and the three-digit CVV code on the back of the card
  • For card not present transactions with large ticket sizes, only ship merchandise to the billing address
  • Ship merchandise to the customer before you charge the card
  • Respond to all retrieval requests and chargebacks immediately upon receipt

Article by Clearent by Xplor

First published: March 17 2023

Last updated: March 28 2024