How to Get Chargeback Protection From Online Marketplace Without A Subscription

So what is a chargeback protection? A chargeback occurs when a purchase is canceled, and a customer receives their money. They generally receive this money back due to a dispute they’ve filed with their credit card company. The number of chargeback frauds has been rising recently, rising by 20% on an annual basis.

In the beginning, the purpose of chargebacks was to give customers an extra layer of security. The banks wanted to boost their confidence in the safety of debit and credit cards. Numerous factors can lead to the initiation of both legitimate and fraudulent chargebacks. A customer may question a purchase listed on their bill for several reasons:

They are unfamiliar with the charge on their card. The customer was billed incorrectly, or they never received their order. They believe the goods or services they paid for did not meet expectations. Their data was stolen and is being fraudulently utilized. Customers are unsure how to start a return because the merchant’s return policy is unclear.

Chargebacks for purchases made using fraudulent credit card information account for over 30%. Processing during shifts. Chargeback fraud has a significant negative effect on a company’s bottom line. In 2020, a $1 fraud cost a US retailer $3.36. If businesses cannot stop this fraud, they can incur significant losses.

Four Grounds for Chargeback Requests from Buyers.

1.      Merchant Error.

Incorrect item shipped, discount forgotten, or technical error.

2.      Unauthorized Payments.

Usually made by relatives, like kids who buy mobile games without their parents’ permission.

3.      Unmistakable Fraud.

Thieves stole card information and used it to make purchases without the original cardholder’s consent.

4.      Friendly Fraud.

Friendly fraud is also referred to as liar buyers or chargeback abuse. We will go into more detail about this expanding issue below.

Additionally, since the COVID-19 pandemic, retailers have noticed an increase in chargeback requests used as a defensive strategy against them. Customers might use chargebacks, for instance, to protest a return policy they don’t like.

How to Get Chargeback Protection from Online Marketplace?

You, too, need to be aware of the fraudulent chargeback activities. It is because your merchant services will contain all the information. However, the following are a few ways to get chargeback protection. Here are six ways to be proactive about avoiding chargeback frauds:

1.      Keep Up-to-Date on New Chargeback Codes.

Did you know that the reason codes for chargebacks are not fixed or permanent? Each card network will have a new set of chargeback reason categories. It will allow customers to specify the basis for their dispute when requesting a refund or chargeback.

The businessmen can only defend themselves if they know proper new chargeback reasons. So if a customer says that the charge was a fraud, but the business owner has proper proof, they can reverse the claim. In such a case, the business owners can contest the customer’s claim so that they get chargeback protection.

Additionally, you need to stay current with chargeback reason codes. This can help you understand why customers request chargebacks if you can identify a recurring problem.

Maintain Precise Documentation of All Card-Based Transactions.

Signatures and receipts can be some of the best proof when contesting chargebacks. In the long run, keeping meticulous records of transactions can be beneficial, particularly if you have tangible records like these.

Nevertheless, it is not always possible to have physical documentation or signatures. It is necessary due to the rising number of e-commerce-based transactions.

In this situation, make sure to keep records of card-based transactions. Including the origin of the transaction. Especially the date and time of the transaction or the. Or use a technology solution that can do so.

Utilize Technology Created for Chargeback Protection.

Visa and MasterCard developed authentication technologies. These technologies include 3D Secure to increase card acquisition security. It also gives chargeback protection to the businessmen. So, instead of placing chargeback liability on the businessman, this protocol will transfer it back to the issuer.

Additionally, identifying high-risk transactions and developing new rules for transactions won’t accept. IP addresses or blocked countries, fraud protection technology can help. Businesses identify chargeback fraud opportunities before they occur.

Make Certain Your Staff Is Well-Trained.

When your team is aware of the patent processor protocol, they will be able to better identify the suspicious activity. The best line of defense for a businessman is training their staff.

And they need to teach them for both the transactions. When a card is present and when a card is not present. This can stop fraud before it gets started. Secure payment procedures protect businesses. To help your team better recognize risk when they encounter it, regularly train them on compliance.

Keep Your Payment Descriptions and Name Consistent.

A consumer’s first step may be to file a dispute if they don’t recognize the charge on their card. When consumers don’t recognize a name or remember making a purchase, it can make them anxious.

This can put them in damage control mode. As if their credit cards are stolen. And in case their credit cards or identities were stolen. Simply ensure that the company name that appears on a charge matches the company name that the customer recognizes. This is a great way of chargeback protection and reduces the risk. This is a quick fix. This can spare your company from costly chargeback hassles.

Addressing Customer Service Concerns.

Businesses must make it convenient for customers to resolve their disputes. That’s why they should directly consult them.

Businessmen need to take precautions to stop fraudulent activities and provide chargeback protection. It is because “friendly fraud” rates exceed $130B in damages from the previous year. However, you can get that by offering good customer support. Allow your customers to get in touch with your company directly. This way, they can address issues about the quality of your products or services.

However, not all companies might be able to offer their clients this level of assistance. That’s why businesses must address any customer service questions. or issues quickly. Another effective strategy to reduce uncertainty is posting your return policy on your web page. Post it somewhere where the customers can properly see it. Also, try to put along some of the frequently asked questions so they can have their answers without even asking.

Conclusion.

A growing number of transactions in today’s digital marketplace occur without physical cards being present. This raises concerns about the risk of chargeback fraud. Chargebacks cost businesses 4.4 percent of their revenue in 2019.

That’s why businessmen need to take action today and take control. They need to do everything they can to provide chargeback protection. They can do that by preventing fraud from the start.

Merchants need to be aware of this growing risk to their bottom line. Whether protection is achieved through protocol process training, establishing more transparent lines of communication with customers, or investing in fraud protection technology.