Think back to your grandfather’s day, a time before the ubiquity of charge cards. If you wanted to purchase a good or service you either forked over the cash or used a check. Fast forward to today, most people opt to use their credit cards rather than cash or check. There have been some amazing leaps in credit card security that have made it safer than ever, but at the same time those criminal forces that wish to rob decent customers of their hard earned money are always working to find new ways to get around all these protection measures. On the consumer end their is fraud protection, if a card is stolen or misused they can file a claim and have their money reimbursed, this is most assuredly a good thing, but when it comes to the small business owner it can potentially mean chargeback fees. A chargeback is the term for when a credit card company deems that a merchant is liable for fraud. If you own a business you know that mistakes happen and there are several things that can be done to prevent these mistake including instituting practical measures as a means of chargeback protection.
How Can Chargebacks Hurt Small Business?
Chargebacks occur when a financial institution returns money to customer due to a disputed charge, these charges can come about due to fraud or due to the customer’s belief that they did not receive the appropriate product or service. While this practice can save the consumer quite a bit of money it can detrimentally harm the bottom line of small business. Unlike larger corporations that are able to take the occasional financial hit. Small business can be crippled by having to pay a number of chrageback fees. There has been an increasing market for chrageback protection for businesses. While this is a great way to minimize the negative effects of chargebacks on small businesses, for the fledgling business this could be costly. Before choosing to go through a financial service there are practical chargeback protection methods that you can institute in your small business to mitigate your losses. The upshot of these methods is that they also just happen to be good customer service measures.
Preventing Chargebacks Due to Poor Customer Service
One of the most practical means of chargeback protection due to dissatisfaction with a product or service is to maintain an open channel of communication. Rather than having to deal with the litigation and hassle that is included in the charge dispute process, focusing on customer satisfaction by keeping an open dialogue and tempering expectations can help a great deal in preventing chargebacks due to miscommunications.
Checking Signatures and State Identification can Save you Chargeback Fees
Picture this, your business is in the middle of a rush , there are several customers waiting in the queue to check out. Naturally the impulse is to get through them as fast as possible, the rationale behind this being a customer being served is a happy customer. So what do you do? You swipe credit cards without checking supporting documents or, at the least looking at the back of the credit card for a signature. Unfortunately your haste can cost you money in the long run. Many Crooks rely on the fact that merchants are too busy to bother to ask for proper identification when using stolen credit cards. This, in the eyes of the financial institutions, constitutes negligence on the part of the merchant. It is good practice to keep in mind that a little bit diligence and attention to detail even while under pressure can mean more profit in the long run.
As mentioned in the beginning of the article crooks are constantly evolving with new security measures. It is a constant war of attrition and it is almost impossible to plan for every eventuality and situation that might result in a chargeback, but with a bit of training and discipline you can at least work to prevent them from occurring before deciding to depended on a financial institution sponsored form of chargeback protection.
