Chargeback Protection: How to Improve Your Defenses
Every business should have chargeback protection to fend against fraudulent and disputed transactions. Chargebacks can be costly for a business- not only in terms of money lost but also in the amount of time and resources spent trying to dispute the chargeback. This blog post will discuss what a chargeback is, why they happen, and how payment processors provide chargeback protection for merchants.
What is a Chargeback?
A chargeback is a transaction that is disputed by the cardholder after settlement. Chargebacks can happen for various reasons but, most often, they result from fraud, friendly fraud, or from a customer complaint. When a chargeback occurs, the card issuer (usually the bank) will refund the cardholder for the transaction amount. The merchant will then be responsible for paying the chargeback amount plus a fee, regardless of whether the chargeback was from fraud (true or friendly) or merchant error. The difference between true and friendly fraud is simple:
- True fraud chargebacks are filed by cardholders who were not the ones who made the purchase. In other words, someone stole their card information and used it to make a purchase without their knowledge or permission.
- Friendly fraud chargebacks are filed by cardholders who did make the purchase– yet a dispute arises accidentally or for malicious reasons.
There are certain things a company can do internally to combat these charges, such as refund policies and delivery confirmation. However, the best solution is to have a skilled payment processor. A merchant account with chargeback protection will help your business fight chargebacks and protect you from future offenses.
Chargeback Protection for Merchants: What’s Included?
First, it’s essential to understand why chargebacks happen and do your best to avoid them. Second, have clear and concise policies and documentation in place so that customers know what to expect when they make a purchase from you. Finally, consider using a chargeback protection service to help you prevent and respond to chargebacks. There are many different tools and safety measures offered by chargeback protection programs. Some of these tools include:
- 3-D Security
- A dedicated account manager to help you resolve chargebacks and prevent them from happening in the future
- A suite of tools and resources to help you prevent chargebacks from happening in the first place
- Access to a customer support team
- AVS/CVV matching
- Chargeback Alerts
- Chargeback mitigation (intercept customer complaints before they become chargebacks.)
- Fraud risk scoring
- Velocity checking
These features help protect your business’s money and time against the unavoidable persistence of chargebacks.
Where to go for your Chargeback Protection
Seamless Chex has all of your business’s security needs. We provide our merchants with valuable resources to help them prevent chargebacks and fraud. We also have a dedicated team of account managers and customer support representatives who are ready to assist you with any questions or concerns. Contact us today to learn more about how we can help you protect your business from chargebacks!