With the advent of technological advancements these days, many businesses allow credit and debit cards as payment methods. However, the settlement of payments made for the goods or services offered can be a tricky process. If you’re a merchant who relies on payment cards, you need to settle these digital payments quickly to boost your revenue stream.
Unfortunately, situations like chargebacks can impact your business’s ability to generate more revenues within a certain amount of time. A chargeback refers to the reversal of a credit card transaction by the concerned bank institution due to the cardholder’s request. However, although it’s a protective measure for consumers, it becomes unlawful when it constitutes fraud.
Chargeback fraud occurs when a consumer intentionally and deliberately purchases goods or services from a merchant and reports fraudulent transactions. Once the chargeback request is approved, the consumer gets refunded with the cost while they keep their purchase. This situation can cause financial losses to the business over time.
Thus, if you want to protect your business and know chargeback fraud management, below are the five tips to consider from the get-go:
1. Keep Proof Of Payment Transactions
One of the best ways to safeguard your business against chargeback fraud is to secure copies of your transactions. When you’re dealing with a chargeback dispute, you can use some pieces of evidence to prove the legitimacy of the transaction and overturn the chargeback. This method is also beneficial against chargeback fraud.
When you can show proof of the transaction, you can prevent criminals from using chargebacks to defraud your business for financial gain. Generally, the standard pieces of evidence for every transaction can include:
- Copy of your return policy;
- Receipts or sales orders;
- Proof of delivery for online sales and many more.
2. Respond To Chargeback Claims Quickly
When it comes to dealing with chargeback disputes, time is critical. Although consumers usually have more or less 120 days from the purchase date to raise a chargeback with their card issuers, business owners only have 45 days to act on the claims. Hence, when you fail to respond to these disputes on time, the chargeback claim will be resolved in favor of the consumer. This is regardless of whether it’s fraud or not.
To avoid this situation, your business must respond to chargeback claims as promptly as possible. That way, you can settle any concerns or confusion around the purchases and eliminate any chargeback fraud opportunity before it happens.
So, if you need help in handling your chargeback claims more efficiently, using a chargeback fraud management solution can be an excellent idea. It helps reduce the resources necessary to respond and manage chargebacks to increase your chances of winning disputes.
3. Take Advantage Of Fraud Protection Technology
Another method of protecting your business against chargeback fraud is to leverage the use of fraud protection technology. Unless your business is an expert in handling chargebacks, you need to use innovative solutions to prevent fraudsters from defrauding your business.
For example, you can integrate authentication methods like 3D secure to safeguard your business from chargeback fraud by shifting the liability to the card issuers. Also, you can partner with a fraud protection company that uses technology to mitigate the disputes arising from fraud by determining high-risk transactions and fraud opportunities.
4. Make Sure Your Team Is Well-Trained
You can also safeguard your business against chargeback fraud by providing training to your team members about credit card transactions and secure payment processes. For instance, when they’re well-versed with the payment processor compliance protocol, they can easily detect any suspicious activity in your dealings.
Thus, if you want to stop chargeback fraud before it happens, make sure to train your team about some security measures to achieve positive outcomes.
5. Maintain Accurate And Clear Payment Descriptions
Having inaccurate and unclear payment descriptions can expose your business to chargeback fraud risks. The payment description refers to how your business name appears on the cardholder’s bank statements. Hence, when fraudsters notice your payment description is confusing or incorrect, they may willfully request a chargeback and pretend they don’t know where the transaction comes from.
To stop this scheme from financially affecting your business, you need to ensure your payment description is accurate and transparent at all times.
Bottom Line
Chargeback fraud can be a serious financial concern for most businesses. With the rise of digital payments nowadays, your organization needs to stay on top of its security efforts to stop chargeback fraud from being a growing threat to your business goals. Therefore, follow the tips mentioned above in mind to take action and safeguard your company from the start.