First of all, what is a chargeback? What function does it perform in your eCommerce? How does it affect your business? Which are the most recurrent? We will tell you all this and much more throughout this post because the chargeback ratio is a perfect indicator to evaluate the security in the data management of your online store. Join us and don't miss it!
What is a chargeback?
It is a return made by the responsible bank at the request of the cardholder to request a refund. Usually, it is done because you do not agree with the charge. However, the big question in eCommerce is how to avoid it? The answer lies in keeping a close eye on your finances. Over the years, it has been shown that credit card fraud is on the rise, so it's important to have secure tools capable of diagnosing any risk or failure.
When a consumer detects a purchase on their credit card that they do not recognize, they can refuse it by contacting the financial institution. However, eCommerce must be protected against chargeback fees, either by adopting a transparent payment policy, by having a good anti-fraud system or by having secure payment gateways.
Main types of chargeback
We often encounter numerous chargebacks that affect the operation of our online business. The most common are:
- Fraud. Some keys to reducing fraud in e-commerce are found in the improvement of strategy, the adoption of fintech tools, and the optimisation of finances with the help of a financial partner. Fraud is one of the most frequent chargebacks between the cardholder who makes the purchase and the shop where he or she makes it, so it is important to have payment systems that provide maximum confidence and security to the consumer.
- Duplication of the charge. Sometimes, it may happen that the e-commerce mistakenly charges the product or service several times. Or even some kind of failure occurs when performing the operation, so it is recommended to have a cascading system that redirects the operation to another alternative payment method when the operation fails and is not completed.
- Products not received. The eCommerce should always clearly show the policy of rejections and returns of products from their online store, as well as be accessible to any user when making the purchase. This will help you increase their confidence in the business.
- Cancellation or return. The most common returns are made when the customer is not satisfied because the product is not what he or she expected or there has been an error in the product features.
Keep your business safe!
Avoid fraud in your eCommerce
According to data published in the Autónomo Digital, "the figures of fraud with bank cards issued in Spain have been increasing in recent years". Some data from the Bank of Spain show that "in 2016 there were 880,000 fraudulent operations involving a total of 56 million euros". Furthermore, "the victims of these identity frauds are not only individuals, but also online shops".
Surely, if you run an eCommerce website, reducing fraud is one of your main goals. Fighting it must be a constant task that must be implemented with a fraud control system that can detect and stop it. That's why it is essential to have completely secure payment gateways. In the information age, the storage and management of personal data has become a matter of particular interest for e-commerce.
The threat to user privacy and security is a reality, which is why the PCI DSS regulation, or the Payment Card Industry Data Security Standard, was created, which regulates the management and storage of data associated with people's payment cards. All businesses that manage or store data associated with payment cards of individuals must comply with the regulations.
To this end, tokenization has been implemented. This is a system through which a numerical combination associated with a customer's confidential data is associated and replaced. This process consists of two phases: encrypting sensitive data and assigning a token to the encrypted data.
Apply the best tools to optimise your finances to your eCommerce and discover different ways to get the most out of your business!
Chargebacks and security in your eCommerce
Decreasing chargebacks is a guarantee of security for your business. They are the great nightmare of many online businesses, especially when it comes to fraudulent returns.
The Payment Card Industry Data Security Standard (PCI DSS) sets out the requirements for compliance organised into the following sections: developing and maintaining a secure network, protecting cardholder data, maintaining a vulnerability management program, implementing strong access control measures, monitoring and regular testing of networks, and maintaining an information security policy.
Security in payment methods is essential and the regulations arise from the increase in cases of payment card fraud, which triggered the alarm in the security of transactions. As a result, a security standard was created primarily aimed at reducing payment card fraud and increasing data security through infrastructures to protect the processing, handling and storage of credit card data.
Do you have a payment gateway free of chargebacks? Are you doing something to increase security in your eCommerce? Keep your data safe and ensure the success of your transactions!