Prevent Chargebacks by Improving Customer Service
Prevent Chargebacks: Improve Customer Service to Reduce Risks and Increase Profits
Did you know 86% of cardholders file a chargeback without first seeking a refund from the merchant?
There are many reasons why this could be happening. Most merchants assume the cardholder is lazy and in search of a no-hassle solution. While this may be true, it’s also possible the merchant is providing subpar customer service.
Why Merchants Need Stellar Customer Service
Most merchants are disappointed when a customer requests a return. While these profit losses aren’t ideal, they sure beat a chargeback!
On the surface, a chargeback might not seem that different from a return. After all, the original profits are lost. However, there is a big difference.
If a customer returns the item, the merchant will be able to resell it—meaning a profit is still possible. With a chargeback, the product is lost forever—no future earning potential is possible.
Plus, each chargeback comes with an administrative fee. This can range from $5-$75.
Chargebacks also come with other irreversible fines and long-term consequences. If a business receives too many, the acquirer could simply terminate the merchant account—which would cause the business’s demise.
Therefore, it is essential for merchants to encourage customers to request a return rather than file a chargeback. Here are the best ways to improve customer service and reduce the risk of chargebacks.
Improve Customer Service
If it is easier, quicker and more effective for the cardholder to contact the bank than deal with your customer service department, you’re asking for trouble! Customers will naturally gravitate to the path of least resistance.
Make a return with your business the easiest option available. Here’s how to make that happen.
1. Share Contact Information
Customers will only contact the merchant for a refund if they can find the essential contact information!
Here are some great places to list your contact information (including, but not limited to, phone number, email address, web site URL, and physical address):
• Social media accounts
• Order confirmation email
• Delivery receipt
• Catalog and other printed materials
2. Answer the Phone
Thanks to technological advancements, there are numerous ways for a cardholder to contact a merchant. While not as sophisticated as some other options, phone calls are still a preferred method of communication.
A disgruntled customer needs to be dealt with as soon as possible. The longer the frustration stews, the higher the chargeback risk. Letting a customer sit on hold will only make the situation worse. And if you send the customer to voicemail, you’ve basically guaranteed a chargeback.
3. Reply to Emails
Again, timely communication is essential. Merchants need to address the customer’s issues before the cardholder contacts the bank.
Send an automated message to each email you receive. Let the customer know when a personalized message will arrive. Take the time to thoroughly address the customer’s grievances and offer a plan to rectify the situation.
4. Be Social on Social Media
Don’t just use your business’s social media accounts to market your products and services. Use them as an open, honest, and public platform for customer service.
If a customer reaches out to you via social media, make sure you acknowledge the issue. Again, adequately address the issue—don’t just provide a generic statement like, “Thank you for bringing this issue to our attention.”
5. Consider 24/7 Customer Service
We live in a world of instant gratification. If customers can shop with your business at all hours of the day and night, they should also be able to discuss potential issues with you in the same manner.
6. Check Your Billing Descriptor
Often times, customers are first aware of a transaction issue when they see their credit card statement. The bank’s phone number is listed right there, making it very easy to request a chargeback. Make sure your phone number is just as easily accessed.
Check your billing descriptor—the transaction description that appears on the credit card statement. Provide as much details about your business as possible.
7. Adhere to Shipping Best Practices
Make sure the customer understands when the product should arrive. What is the anticipated delivery date for each shipping method?
Don’t charge the customer’s card until the item has shipped. This prevents any issues associated with backorders. If the product will arrive later than anticipated, let the customer know. Allow the cardholder to cancel the transaction if needed.
8. Provide Timely Cancelations and Returns
If a customer wants to return an item or terminate a service, grant these requests immediately. A customer is likely to file a chargeback if the merchant doesn’t take the necessary action quick enough.
Improve Customer Service, Reduce Chargebacks, and Increase Profits
Providing outstanding customer service is the easiest and most effective way to reduce the risk of chargebacks. Make a few changes to your business policies and procedures; you’ll see improved results in no time.
If you suspect your customer service needs a more drastic overhaul or you’d like to implement these changes as part of an overall chargeback management scheme, let us know. Just fill out the form to the right and we’ll take a look at your current chargeback situation.[/vc_column_text][/vc_column][/vc_row]