Chargebacks were designed and implemented to protect cardholders from fraud and abuse. These days, unfortunately, many chargebacks stem from cardholder’s themselves committing fraud and abusing the chargeback process. However, quite a number of chargebacks are not malicious and stem from confusion. By reducing the risk of misunderstandings, merchants may be able to significantly reduce chargebacks.
We’re going to cover some general tips for clearing up confusion. When it comes time to develop and implement strategies for your company, it’d be wise to examine chargeback transaction data to identify the biggest sources of chargebacks and study specific issues, like misunderstandings with customers. From there, you can develop strategies customized to your business.
1. Use Clear Billing Descriptors
Perhaps the biggest source of chargebacks stemming from confusion is the use of vague or confusing billing descriptors. Some businesses use a static billing descriptor, which will contain only the business’s name. Businesses can also opt to use a dynamic descriptor, which will include not just the business name, but also a basic description of the product or service sold.
If Jane Doe owns a café called Acme Fresh Brews, she might use a static descriptor with only the business name (Acme Fresh Brews). Or she might set up dynamic descriptors and describe what was bought (Acme Fresh Brews/Lg. Mocha).
Confusion often sets in when the business’s legal name is different from its “doing business” name. Jane Doe might hold Acme Fresh Brews under a holding company called “Doe Café Holdings.” When Doe Café Holdings turns up on the customer’s credit card statement, there is a high chance that they won’t recognize the brand and may think that they have been defrauded.
2. Use Solutions Like Consumer Clarity and Order Insight
Mastercard’s Ethoca offers an information-sharing platform called Consumer Clarity. This platform provides additional details for transactions. Banks can offer Consumer Clarity as a white-label service and app that consumers can log into. Merchants, meanwhile, share data through Ethoca’s Merchant Transaction API. Visa’s Verifi provides a similar tool called Order Insight. ChargebackHelp makes it easy to integrate both.
3. Set Up a Responsive Customer Service Department
If a customer is misunderstanding something on a receipt, has gotten an incorrect order, or is otherwise confused, they may first reach out to the business. This provides the merchant with an opportunity to clear things up. Often, simple clarifications can resolve the problem. Sometimes serious issues occur, like the wrong product being delivered. When these issues do emerge, you’ll want to resolve them as quickly as possible.
If a business is slow to respond to the customer, they might get antsy or fear that the business itself is defrauding them. In these cases, they may simply turn to their bank to file a chargeback. Once a chargeback is filed, it’ll be a black mark on the merchant’s effort even if it’s later revealed that the whole incident was nothing more than a simple misunderstanding.
It’s also wise to offer free and easy returns and exchanges. Sometimes customers get confused while ordering something and they select the wrong product. In this situation, the customer is at fault. The business might want to refuse a refund since they delivered the ordered goods. The problem, though, is that the customer could file a chargeback in an attempt to get their money back.
4. Make Sure Product Descriptions and Product Pages Are Accurate
If your business operates online, keep in mind that customers may not be able to see and test the product before buying it. If a product page oversells a product’s capabilities or the pictures don’t match up with what’s delivered, the customer could be left confused and potentially may even feel like they were defrauded. In either case, they may try to initiate a return or file a chargeback, which will cost your business.
5. Offer Easy Shipment Tracking
Another key consideration for online merchants is shipment tracking. If your product doesn’t arrive quickly, and especially if the delivery doesn’t meet the expected delivery by date, the customer may think that the product got lost in shipment and that they will never receive it. As such, they may turn to their bank for a chargeback.
In some cases, the customer will first reach out to the merchant’s customer service department. As mentioned above, timely responses can prove crucial in these situations. Better yet, by providing shipment information, the customer can track and monitor the shipment without needing to get in touch. If they see that the shipment has been delayed but still on its way, they may be more patient.
6. Adapt Going Forward and Use the Right Chargeback Management Tools
The above tips are only a small sampling of the steps merchants can take to reduce confusion and chargebacks stemming from said confusion. As you implement strategies, you should continue to monitor data and what’s driving chargebacks to your business. By developing a better grasp of the issues, you can evolve and adapt your strategies.
Chargeback and dispute management tools, including those offered by ChargebackHelp, can help you gather and analyze data. The right tools also make it easier to prevent disputes from turning into chargebacks. Need help reducing confusion and fighting chargebacks? Contact our chargeback experts today!