Whether you’ve accepted online payments before or you’re new to Square’s e-commerce integrations, there are a few things to keep in mind to best protect your business from chargebacks. If you’re like most online businesses, you don’t have the opportunity to interact with your customers face-to-face. You may need to take some extra steps to ensure you can avoid, or successfully win, a chargeback.
This article will focus on the basics of how to best protect your business from non-fraud chargebacks (looking for fraud prevention tips? See our guide here). Different from fraud, a non-fraud chargeback typically results from an unhappy customer when something goes wrong with a sale.
First, ensure that you have accurate product descriptions on your website. Your customer should have the right expectations of the product they will receive from you—this helps you to avoid disagreements and issues once the product arrives in the customer’s hands.
Second, make sure your refund, cancellation, and warranty policies are visible on your website and when a customer is inputting their card for payment. No one enjoys the surprise of finding out something is not returnable after the fact, and that’s when a chargeback could occur. You can take it a step further by ensuring your cancellation and refund policies appear on the receipt you send to your customer for their purchase.
Third, ensure that your customers understand how to reach you if there is an issue with the product once they’ve received it. If you can resolve a customer issue before it turns into a refund or a chargeback to avoid lost revenue, that’s the best outcome. Respond to customer issues in a timely manner before they become a negative online review or worse.
Lastly, it’s always prudent to ensure that you have enough money in your bank to support you through any unexpected issues you may experience with refunds and chargebacks. Although strong sales growth is an exciting moment for any business, it can leave you in a tight cash position. It’s important that you ensure you have the funds on hand to withstand any unforeseen events.
Although following these guidelines will reduce your chances of receiving a chargeback, the risk of receiving a chargeback is always present when accepting credit card payments. If a payment you take is charged back, Square will represent you in the chargeback process free of charge, and our team of specialists will use their expertise to help you along the way.
