Minimize Chargebacks, Maximize Cash Flow
Card acceptance is all about improving your business' cash flow. Unfortunately, chargebacks can disrupt your steady flow of cash.
The good news is that chargeback disputes often result from easily avoidable mistakes. Consider these steps for reducing or preventing chargebacks:
Don't ignore declines.
Do not complete a transaction if the authorization request was declined. Instead, request a new form of payment from the cardholder. If you receive a "Call" message in response to an authorization request, do not accept the transaction until you have called your authorization center (be prepared to answer questions and/or allow the operator to speak with the cardholder).
Look for cardholder signatures.
Don't accept a transaction if the cardholder signature is missing or questionable. If the card is unsigned, request a photo ID that has a signature and have the cardholder sign the card in front of you. Always compare the cardholder's signature on the sales receipt with the signature on the card.
Observe the "Valid Through" date.
Don't accept a card after its "Good Through" or "Valid Through" date unless you obtain an authorization approval for the transaction.
Make a card imprint.
If for any reason, you must key-enter a transaction to complete a card-present sale, make an imprint of the front of the card on the sales receipt using a manual imprinter. Make sure all of the transaction information appears on the imprinted copy, including the embossed account number and expiration date, amount, business name and location, and cardholder signature.
Require the actual card itself.
Do not accept a transaction if the cardholder has the account number but not the actual card itself.
Don't make estimates.
Do not estimate transaction amounts. For example, restaurant merchants should authorize transactions only for the known amount on the check and not add a tip.
Focus On Communication.
Good customer communication is often the easiest and most cost-effective means of avoiding chargebacks. A confused customer is likely to initiate a dispute that could result in the reversal of a transaction.
Provide a recognizable business name.
Make sure customers recognize the DBA (Doing Business As) name that appears on their credit card statement. For example, if customers think they were shopping at "Jacqui's Dress Shop" but the DBA name on their statement is "Cool Stuff, LLC," they may contest the charge.
Provide a phone number.
Providing customers with a local or toll-free phone number on their billing statement or receipt allows them to contact you directly with questions. This gives you the opportunity to correct any misunderstandings quickly and efficiently.
Promptly process retrieval requests.
Both customers and card issuing banks may request copies of sales and credit drafts. Failing to provide adequate documentation for copy requests could result in a chargeback, so make sure your business is structured to be able to provide this paperwork quickly and easily.