The 2023 Guide to Managing (and reducing) Chargebacks

Customer Experience
Data Analytics
Fraud Prevention
Supply Chain Optimization

Table of Contents

Chargebacks are a great way of encouraging customers to use debit and credit cards for shopping. They ensure the reversal of funds to the cardholder's account in case any charge dispute arises. But from the perspective of merchants, these chargebacks are a significant issue because they have to deal with them frequently. Due to the pandemic, many people switched to making card payments, increasing the number of chargeback incidents.

If you're an e-commerce merchant, we're sure you, too, must often face customer chargebacks. And if you're wondering how to prevent Paypal chargebacks, here are a couple of ways that can help you – let's have a look:

Enlist to-the-point Product Descriptions.

The question of returns and refunds arises when customers wish to return the product they received. One of the most common reasons listed for returns is that the product did not match the description they saw on the website. As an e-commerce merchant, you can draft product descriptions in detail to reduce such recurring incidences. Also, consider supplementing the accurate product description with close-to-real images of the product so that the customers have a fair idea of what they're purchasing.

Provide Shipping Details

As a trusted e-commerce business, you must share your customers' shipping details. Customers often ask for chargebacks if they need to figure out the status of the ordered items for a long time. It would be best if you had to give them a fair idea of the expected delivery date, the shipping carrier's name, the link to track the parcel, and customer service details. If they don't receive their order in time, they know how to track it or whom to reach instead of initiating a chargeback.

Set Clear Refund Policies

When people purchase from your e-commerce business, you also need to let them know how to return the product if they don't like it. Set out clear refund policies, which will assist your customers in following the proper method for returning the product rather than disputing a charge with their bank. Also, make sure you give your customers a refund by reversing the funds in their accounts. Remember, refunds are way easier than customer chargebacks!

Maintain a Proper Inventory Record

Out-of-stock items often need to be checked in e-commerce businesses. It is essential to maintain a proper detailed inventory record online so that customers can avoid placing an order for a product that's out of stock. If this does happen, the customer would be left with no option but to initiate a chargeback. An accurate and up-to-date inventory record can save you from all the hassle a chargeback ensues.

Enhance Payment Security System

Having a secure payment mechanism can cut down the percentage of chargebacks drastically. Most payment service providers have different support mechanisms for their clients to help them reduce the volume of chargebacks. Please find out how your payment service provider can help secure your e-commerce business against chargebacks and ensure they implement them.

You must also regularly update your point-of-sale software to protect it from security threats. Also, you can add an extra layer of security by asking customers to use their PINs to make payments via cards. Despite this, there will still be many customers who would prefer contactless payments – for them, you would have to invest in payment gateways based on EMV chips and NFC technology. All of these measures help manage chargeback instances in your e-commerce business.

Summing Up

Chargebacks can be a complete headache – they waste time, effort, and, most importantly, revenue in the business. This is why prevention is way better than dealing with them – especially as an e-commerce business, you don't want to waste your time and effort resolving issues like customer chargebacks.

Also, after reading this post, we hope you no longer have to think about how to avoid Paypal chargebacks. To implement different mechanisms mentioned in this post to help reduce chargebacks.

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