Chargebacks occur when transactions that have been processed are then reversed. For example this could happen due to a dispute over the transaction, where the end customer claims they never authorized the transaction. The transaction is then reversed, and the customer receives their money back. This is, in effect, losing the money the business could have earned. The effect of chargebacks on any company is unfavorable. However, it can be even more detrimental for online businesses since the Internet can spread information very quickly. This could even damage their reputation among customers, credit card processors, and credit card merchants.

As mentioned, chargebacks are bad news for any company, and everyone should try to reduce chargebacks in their transactions. Below are 10 ways to reduce Chargebacks:

1. Keeping all transaction or shipping receipts and notes when you ship out goods to customers.
2. If you take phone-in orders, get as much information as you can, make sure it is all recorded so that you reduce the chance of unauthorized or fraudulent transactions.
3. Ensure that the system immediately rejects any expired or invalid cards, so that it doesn’t become a chargeback later.
4. Make sure that no technical errors occur, such as duplicate processing where the customer pays twice from accidently pressing the pay button twice.
5. Avoid manual errors as much as possible.
6. Ensure your name is easily identifiable when it shows up on the customer’s bill. This helps the customer to identify that the payment was indeed authorized, and will help reduce the chargebacks.
7. Ensure that the card has not been stolen, and verify all of the details before ringing the charge up.
8. Be proactive and mail confirmation letters for each transaction.
9. Keep transactions up-to-date: if there is a delay of any sort, keep the customer informed and give them alternative options for other purchases.
10. Mobile card readers can address most chargeback issues, as they are card present transactions. They are easy to carry and will give you authorization in real time. Plus you get a signed proof of delivery.