What is a Chargeback?
If you own a business that deals with credit card transactions, you are most likely familiar with a chargeback. These returns can definitely take a huge toll on any business, which is why it is important to offer superior customer service and satisfaction to your clients. Not only will this ensure you a solid sale and profit, but it will reduce the risk of a chargeback. Below you will discover the answer to, “What is a chargeback” and much more.
While some customers are very picky and will become anxious about a specific credit card payment, others will complain about untimely order processing. If you fail to produce sufficiently and efficiently, you risk a chargeback. In this case, the customer will file a dispute with their credit card provider on a specific transaction.
In most disputed transaction cases, the customer will receive a full refund, which is automatically withdrawn from the merchant’s account. While one loss will not ruin a company financially, if the problem continues to escalate, they may potentially face financial failure later on down the road.
Many consumers have been known to take advantage of this option, which is very deceptive and unfortunate for the merchant.
There are several different types of companies that are at a high risk for credit card fraud and chargebacks. Companies that deal in pawn, Internet sales, guns, and gambling are considered among the high risk industry. These businesses will face a lot of scrutiny, plus they are forced to deal with many disgruntled clients. Every time you receive a credit card payment, you must expect the client to cancel or dispute the transaction.
If you own a business within the United States and accept credit card payment transactions, you may be at threat of chargebacks. This forced reversal of funds can occur out of nowhere, which makes it very difficult for high risk merchants to make a profit in some instances. All credit card holders that reside in the United States have been afforded reversal rights, so they can file a dispute with their credit card provider, within a specified time period.
If you own a high risk business, you may want to consider protecting yourself from financial loss, by purchasing a chargeback insurance policy. This will definitely help to relieve some of the burden of this forced reversal of funds. If you are being plagued by the chargebacks, you should consider finding a solution to your problem.
If you would like to learn more on how to stop chargebacks before they happen. Click Here