7 Tips to Minimize Disputes and Chargebacks, Plus Win Back Frustrated Shoppers with Excellent Customer Service

7 Tips to Minimize Disputes and Chargebacks, Plus Win Back Frustrated Shoppers with Excellent Customer Service
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The majority of sale transactions happen smoothly, working much like this: the sale is authorized by the customer’s credit or debit card issuer, you ship the merchandise to them and you get paid.

Once in a while, though, the customer may file a dispute, asking their credit card to reverse the transaction amount. Why does this occur and what can you do to either prevent the issue or turn a frustrated customer into a repeat buyer? We explain the details behind what is most often a misunderstanding between a buyer and an ecommerce brand, and how to kindly turn a mistake into a learning and growth opportunity.

Why Do Disputes Occur?

A buyer may file a dispute for one of three reasons:

  1. Item not received: The buyer claims they ordered and paid for an item but didn’t receive it.
  2. Item significantly not as described: In this type of claim, the buyer says the item they received is significantly different than they expected, based on the seller’s description. For example, maybe the buyer ordered a red sweater, but received a blue one instead.
  3. Unauthorized transactions: A buyer claims that a purchase was made without his/her knowledge or consent. Or, the buyer was charged twice for the same item.

When these things happen, buyers may take action by opening a dispute and asking their credit card issuer to reverse the charge. This is what credit card companies call a chargeback. The credit card company will contact your merchant bank, who’ll contact you, asking to clarify the dispute.

Tips to Help Prevent Disputes and Chargebacks

There are several things you can do to help prevent disputes and chargebacks from happening in the first place. Below are the industry best practices to prevent and handle disputes as they occur.

Provide Contact Information

Buyers may not resort to a dispute or chargeback if they can talk to you about the issue first. Provide an email address or phone number, or even call buyers in advance when you’re selling higher priced items.

Be Responsive

No one likes to wait, so do your best to respond quickly and professionally to all reasonable buyer inquiries.

Suggest Dispute Resolution

If a customer tells you that they intend to file a chargeback with their credit card company, try to resolve the issue first. Some processors like PayPal offer a resolution center where buyers can open a dispute. It also gives you a forum to work with the buyer, so the dispute doesn’t escalate.

Provide a Clear Return Policy

Make sure your return and refund policies are easy to find and understand on your website. If customers claim they couldn’t find the return policy, it can be to your disadvantage, not theirs.

Beyond these industry best practices, there are additional best practices for guiding customers along a positive brand experience despite an internal error. Below are clear and easy steps to ensuring that if and when a dispute or chargeback occurs, your brand handles the issue with excellent customer service.

Prevent “Item Not Received” Claims

Here are some tips to help prevent or minimize losses when your customer doesn’t receive an item.

  • Give buyers realistic delivery dates: Realistic dates can help avoid customers prematurely filing disputes.
  • Ship with online tracking: Use a shipping service that provides online tracking to help confirm that the item was delivered. Standard shipping receipts only show that an item was shipped. If the total sale is over $200, obtain signature confirmation to confirm your customer received their order. The nominal expense is well worth it.
  • Order shipping insurance: Too many things can go wrong in transit. That’s why it’s important to purchase shipping insurance for items that are fragile or expensive. Doing so insures the item in the event it is lost or damaged and includes tracking and delivery information so the customer can see that the order is en route. Insurance will also alert you as to when the package was delivered. In case of a shipping problem, file an insurance claim with the shipping company. They’ll give you instructions on how to proceed with a claim.
  • Be aware of insurance exceptions: Liability for loss or damage may be limited depending on the type of package, the declared value, and/or the shipping company. Talk to your shipping company to ensure proper coverage.
  • Delay shipping high-risk orders: Delay shipment for new orders that are expensive and in demand for 24 to 48 hours, especially when shipping internationally. Use caution when shipping overnight. Fraudsters will often ask for overnight shipping so that they can resell expensive merchandise as quickly as possible.
  • Let customers know when you are out of stock/inventory: If an item is out of stock, remove the listing or update it to reflect the out-of-stock status. Provide an estimated in-stock date or clearly indicate that customers who choose an out-of-stock product are placing an advance order. Likewise, if you know or learn of an issue that might affect customers (bad weather, for example), let them know as quickly as possible. That way, customers can find answers to questions without even initiating a dispute or calling you.

Prevent “Significantly Not As Described” Claims

Here are a few things you can do to help make sure that items meet the buyer’s expectations.

  • Provide pictures and detailed descriptions: Take pictures of products from various angles. Add accurate, detailed descriptions so customers know exactly what they’re buying.
  • Give adequate disclosures: If you’re selling used items, clearly disclose any functional defects or cosmetic damage to the item(s).
  • Answer any questions promptly and clearly: If a buyer does contact you with an issue, being helpful and keeping the tone of communications positive may prevent a small problem from growing into a larger one.

Prevent Unauthorized Transaction Claims

Buyers may open a dispute or request a chargeback when they believe that a purchase or other transaction was made using their credit or debit card without their permission. Sometimes this just may be a simple mistake or misunderstanding, i.e. the buyer may have forgotten they made the purchase or a family member authorized to use the account made the purchase.

On rare occasions, this may be an indication of fraud. If so, be sure to follow fraud detection best practices to help keep both your customer and your store’s data and information safe.

In most cases, the easiest way to settle a dispute is to work with your customer to figure out what happened. Begin the conversation with an open mind, listen to what they have to say and stay focused on a solution. It’s a chance for you to provide great customer service, prevent a possible escalation and turn them into a repeat customer.

This article was syndicated from Business 2 Community: 7 Tips to Minimize Disputes and Chargebacks, Plus Win Back Frustrated Shoppers with Excellent Customer Service

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