In a previous post we have focused our attention in how important is for Merchants to have a website that is fully compliant with the requirements that Cards Brands and Acquiring Banks.
Having a website that is compliant with the regulation is helpful for a number or reasons, but a clear advantage of this is that Merchants can decrease drastically the level of chargebacks due to errors or misunderstanding they may have in dealing with their customers.
According to studies and researches chargebacks derived by Merchant errors can represent almost the 30% of the amount of chargeback received. As you can easily imagine is quite critical then try to reduce at minimum the effects of merchant error, so you can focus your energy in fighting the chargebacks that are derived by criminal intent (personally I include in this category also the so call “friendly fraud”, because at the end of the day customers involved in a friendly fraud are unmasking their reasons to their banks in order to receive their money back).
If we look at the bottom line if the Merchant need to have staff trained in the team that need to deal with the chargebacks, this mean that they need to dedicate time to look at the transaction, check what happen to the customer, collect all the information, create a report to represent it to their Gateways or Banks. Is easy then to image the impact of this in the merchant revenue and that these costs must be added to other costs such as lost good (or replacement), shipping expenses, administrative and dispute fees. To keep losses at minimum it’s critical for Merchants to take care of some aspects related to their day to day operations.
Here you can find some tips that Merchants may find helpful:
1. Describe your product/service properly:
We have mentioned in the post web requirement tips that your web must describe clearly the product and services that are sold. The description of the product is the presentation card you have with your customer. If you sell personal computer make sure to list all tech specification and possible customizations, all features and design available and access to manuals. Using also a proper image to reflect the product is helpful. A clear description of the product will reduce the misunderstanding from the point of view of the customer and consequently will reduce the possibility of chargebacks.
2. Charge the customer correctly
Any product or service has a cost and this cost will be charged to the customer at the end of the check-out stage. Handling with all costs that the customer is going to be charged is fundamental for your transparency. Your price should indicate if VAT and shipment are included. If you offer a discounted price you should show the original price beside the new one.
Make sure also to report the currency so the customer will be aware if any currency conversion fee may be involved in the purchase. And most important: charge the customer only once. Make sure that your payment partner bills the customer in the correct way.
3. Use a proper descriptor for your credit card charge
Acquire banks and Schemes require that merchant need to use a descriptor to identify themselves for each transaction that take place. Generally, the descriptor is the merchant website name and may include also the customer service phone number. If a billing descriptor is clear and informative, it will remind the customer of a purchase made in your website, otherwise if this information is poor or too generic the customer may not recall the transaction (especially in case of services received) and request a chargeback.
4. Deliver the correct product/service at the right shipment address
Seems obvious but if I buy a nice pair or red snikers, size 42 (or 8 in UK, 5 in US) to be received to my home address, I expect to receive that nice pair of snikers right to my home address and will be very disappointed if, when opening the box, to see a pair of pink snikers size 38 (or 5 in UK, 5.5 in US). This lead us to two more tips:
4.1 Return and refund policy should be clear
Research show that more than 30% of all e-commerce orders end up returned due to the following factors (but not limited to):
- Product not matching with the online description (see tip 1)
- Wrong item shipped out (see tip 4)
- Received Damaged items
- Customers changed their mind
Merchants then need to face the possibility of receiving returned items or be asked for a refund in case customers are not satisfied with the purchase they made. Offer a competitive return policy, allow different ways for the customers to return their purchase, offering a product exchange, clarify acceptable return condition and documentation required, managing the returning of the returns in a proper way and communicate clearly the refund and the return policy will help you. Consider these two factors: 65% of customers check the refund and return policy prior to complete the purchase and 48% of them would shop more if the return policy were less painful.
4.2 Respect your delivery time
Delivery time are a critical point in the e-commerce universe and Merchants must take care of this aspect. Involving a third-party collaboration (the shipment company) add an extra point of difficulty but this can be overtaken by offering details of the most comprehensive information about delivery time (and costs involved). You should provide the customer all information about the delivery such as tracking number, name of the shipment company and their contact reference.
5. Have a great customer service
Chargeback most of the time occur when customers are not satisfied with the way Merchants resolve their problems or doubts. If they are not satisfied the natural consequence is to find help in their bank and file for a chargeback. Merchants may need to face customers that are frustrated because they received a wrong item, or because the gift the have bought has been lost, the tech support they have required for downloading an app has been poor, they have received an extra charge in their account, or they are unsure about the purchase. Quick and effective resolution by highly trained customer service agents can not only prevent chargebacks but can turn these frustrated customers into a very satisfied ones. One wise man once said: “if you take care of your customers, they will take care of your business”.