According to the Lexis Nexis Risk Solutions True Cost of Fraud Study released in 2018, the U.S. merchants who provide financial services, i.e., accept credit and debit card payments via in-store, e-commerce, mail order, or telephone phone purchases and so on, have lost 2.41% of revenue to fraud.
This reinforces the idea that fraud is rampant but that merchants that want to succeed must have solid charge-back protection solutions in place. Merchants that fail to take charge-back protection are more vulnerable to cost increases, revenue losses, and business reputations.
Maintain Merchant Accounts with Chargeback Protection
A chargeback is when a credit card brand demands a merchant pay for any disputed or fraudulent transactions. Chargebacks are triggered when a customer reverses an order due to a legitimate complaint, such as not receiving an item as it was marketed, or because they changed their minds about purchases. Any merchant that handles credit card transactions is faced with chargebacks.
If a merchant piles up excessive chargebacks, it not only cuts into their bottom lines, but it also puts their merchant accounts in peril. High-risk merchants especially must be mindful of chargebacks.
Businesses must have merchant accounts if they want to continue accepting credit and debit card payments. Merchants, specifically those that operate mostly online and rely on credit card payments, must do whatever they can to protect their accounts. Taking chargeback protection measures, such as implementing a mitigation system, is necessary to keep businesses fully operational.
Businesses that want to safely and securely accept electronic payments should turn to Canna Group. We tailor payment processing solutions to meet every merchant’s needs while helping them with practical advice concerning chargeback protection. We specialize in providing merchant account services for all types of businesses including the high-risk ones.
Types of businesses most vulnerable to chargebacks
Business that takes a credit or debit card can end up with a chargeback. However, there are some businesses, considered as high-risk by traditional financial institutions, that are more prone to excessive chargebacks. This includes:
• Adult entertainment and novelties
• Cigarettes, cigars, pipes, and smoking accessories
• The business associated with Cannabis
• Mobile app software
• Educational seminars
• Luxury goods and services, such as private planes and travel
• Magazine subscriptions
• Auto accessories and parts
• Moving companies
• Furniture and Gaming
• Credit repair
• Collection Agencies
• Debt consolidation
• Nutraceuticals and Kratom
• Precious metals and coins
• Sports betting
• Tickets for flights, concerts, excursions
Chargeback protection – ways to fight disputes
Documentation of a transaction is one of the best ways to make it more difficult for customers to dispute a charge. Having multiple copies of receipts (printed or emailed), can help prove customers authorized charges. Initially, customers may get their money refunded via a chargeback, but it can be reversed if a merchant can prove to credit card companies during the investigation period that a disputed purchase was processed properly.
Note: Ensure the number on the computer screen matches the one on the credit card during checkout.
Some chargebacks are initiated because customers fail to remember or recognize transactions while reviewing their credit card statements. Sending an electronic receipt with the merchant’s contact information, such as an email and billing support phone number, will help customers remember.
Customer service is probably the number one way to afford chargeback protection to merchants. Customers who feel they received a positive resolution and extraordinary customer service are less likely to request refunds or dispute charges. When a refund is requested, a savvy, professional customer service representative can skillfully diffuse a situation and save a business a costly chargeback.
As the leading experts in the payment processing industry, we will work with you to help explain proper ways to help prevent charge-backs in your business. Give us a call at (877) 420-8625 to discuss how CannaGroup Can help your business today!