One of the things that every business should be wary of when selling their products and services online is chargeback. When they get out of control, the business suffers huge losses and its image can be challeng by payment gateways. The change in consumer behavior caus by Covid-19 has caus e-commerce sales to grow 3 times faster. With more online orders, it’s inevitable that chargebacks will be higher than usual. By the way, online purchases are three times more likely to be return than in-store purchases. Therefore, to operate more profitably, businesses must take steps to ensure that they have the lowest chargeback rate. In this article, we will explain what chargeback is, how to minimize it, how to manage it, and we will also focus on payment methods that do not have chargeback ( Alipay and WeChat Pay ). What are chargebacks.
How does chargeback impact the business
The merchant must cancel the Japan Phone Number List transaction and the customer receives their money. Do not confuse chargeback with reimbursement. With chargeback, the consumer directly asks the bank to forcibly take the money from the company’s account. An investigation follows, and if the bank deems the consumer’s request to be valid, the funds are debit from the merchant’s account and return to the consumer. The customer is under no circumstances obligto return anything purchased. In the case of a refund, the customer only deals with the company. The chargeback procedure The whole procedure is quite long and takes several months, in some cases up to six months. This delay is necessary for a thorough verification of the transaction in order to exclude any attempt at fraud. The chargeback process includes 4 stakeholders: The customer, the customer’s bank, the acquirer and the payment system. The example below is the Visa and Mastercard chargeback process.
How to reduce the chargeback rate
The customer who holds the card submits a chargeback request to his issuing bank. The card-issuing bank monitors transactions for DT Leads breaches. If everything is clear, the bank sends a request to the acquirer to recover the customer’s money, through the payment system us. The payment system (Visa/Mastercard) checks whether it is possible to refund the amount of the transaction. If it is a positive response, the information is transmitt to the acquirer. Subsequently, the acquirer verifies the cardholder’s claim. If the merchant, who made the transaction, has violated the conditions for accepting card payments, the request is forward to him. If the merchant admits the violation, the transaction amount is refund to the customer. In special cases, he can contest the client’s request.