How To Minimize Chargebacks

Chargebacks are horrible for merchants. They are designed to keep customers safe from fraud and identity theft, but they can make life really difficult for your business. For one thing, they are non-expungable, so even if you and your customer resolve the matter, it stays in your bank file, leaving you susceptible to audits or even account termination further down the line.

For this reason, it’s best to prevent the chargebacks from happening in the first place. Start by identifying the main triggers for customer complaints and deal with them one at a time. They include mislabeled receipts, delivery delays, and stalled payment procedures. Pick a merchant account provider with instant customer verification and quick turnarounds from issuing to acquiring banks. This makes the whole process seamless and more satisfying for customers. Here are five more tips.

  1. Make sure your name appears on the customer’s statement

After a transaction, when a customer checks their credit card statement, if the name they see for you on their statement is different from your brand name, the customer may not recognize the transaction and will claim they didn’t make that purchase. Make sure your billing name is recognizable to your customers.  At a minimum, make sure you let the customer know at the time of purchase how your name will appear on their credit card statement.

  1. Get a “VCR”

On April 15, 2018, Visa issued a new system called Visa Complaint Resolution (VCR). It helps both customers and merchants have a better system of dealing with reversals, which then cuts down unwarranted chargeback fees. VCR pre-screens complaints, alerts the business of proven fraud, shifts from litigation to liability, reduces error categories, and changes the language of chargeback. As a business, you have one chance to challenge your chargeback, and you have to respond to disputes within 20 to 30 days instead of the previous 45.

  1. Offer quick customer support

As mentioned above, you need to be prompt in your response because VCR makes its assessments in real-time and you won’t get a do-over. Often, when a client raises a dispute, they’re in a panic, imagining worst case scenarios that involve losing their life savings. If you can just speak to them, you can often calm them down, correct misconceptions, and prove you’re on the case. Offer clear, multiple, responsive options for customer care.

  1. Keep receipts

Record every transaction, using clear names, descriptions, and terms, including delivery dates, refund policies, time stamps, and product images. This is helpful both in showing the customer what to expect and resolving disputes with the bank and card network. It can be especially useful for duplicate transactions.

  1. Track orders

Always use a tracking number. If possible, install features for customers to track on their own, seeing where their package is on the map. It will make them feel better, and looks really cool.

For more information on handling chargebacks, or to sign up for a merchant account, please call (888) 924-2743 or go to


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