If you’re ready to make major changes to your chargeback management techniques and are simply tired of accepting the losses of chargebacks then you need to tune in throughout this read
In a nutshell, here’s how to deal with chargebacks and start improving your net income
1. Determine the Fraud Type
2. Prevention Alerts
3. Look for Hidden Issues
4. Reform Your Policies and Procedures
5. Evaluate if it’s worth fighting the chargeback
STEP 1
Determine the Fraud Type
To effectively determine the type of fraud, it is vital to have an idea about them.
Chargeback frauds take two forms. They may be criminal or friendly fraud.
Data analysis can help (Click Here) in this regard. It enables you to trace the source of chargeback (Learn More) frauds. Thus, you can easily outsmart the perpetrators.
Must Detect Criminal Fraud, but How?
Chargeback fraud is prevalent. Cardholders’ information is often stolen and used to make purchases. Where this happens, the affected parties usually demand chargebacks. You cannot afford to fall prey. Else, you might have to let go of your business. Parties that perpetrate this kind of fraud are clever. They usually prey on unsuspecting sales officers.
Specific patterns are peculiar to criminal fraud. These include:
- Multiple orders for an item
- Where the item is easy to resell and convertible to cash
- Where orders are hurriedly made
- Delivery to a foreign address
If you have suspicions about an order, ensure to ask questions from the buyer. This can expose fraud. Plus, the spending pattern may be suspicious.
How to Catch Friendly Fraud
You are probably wondering how something could be friendly and fraudulent at the same time. Well, this frequently occurs in business transactions. It may be in the form of purchases made by family and friends without the owner’s knowledge.
This type of fraud also occurs when a customer demands a refund for flimsy reasons.
Other instances of friendly fraud are:
- Goods that are not eligible for refund or return
- Making purchases that are beyond the buyer’s financial ability.
Parselytics comes to your aid in this instance. You should use this platform to ease the effects of friendly fraud.
STEP 2
Prevention Alerts can be profit-saving
Chargeback prevention alerts are preemptive. Once the platform has caught wind of a likely Chargeback request, it gives you a heads-up. Thus, you can make refunds where necessary. Also, this alert affords you ample time to collect evidence. These documents may come in handy to disprove Chargeback demands. However, prevention alert works best with international transactions.
STEP 3
Look for Hidden Issues
You may continually suffer chargebacks unless you address the root causes. So, you should analyze your prevention alert and chargeback data to this end.
You may discover that a more significant chunk of your chargebacks is from a particular country. Hence, you may need to analyze the potentials of service delivery in such a country against the risks.
Interestingly, your problem may be internal. It could be the case that your fulfillment department isn’t functioning to the fullest. Workers may also fail to deliver customers’ goods on time.
STEP 4
Reform Your Policies and Procedures
Policy reforms are crucial. They should be customer-friendly. You may need to adjust prices to suit buyers. Yet, this shouldn’t be to your detriment.
Return policies are also significant. More leniency could lead to a reduced chargeback rate. Besides, you may also need to overhaul your customer service desk to be more efficient.
STEP 5
Evaluate if it’s worth fighting the chargeback
Certain factors determine whether you should challenge a friendly fraud. First off, if the Chargeback time limit is unfavorable, you may want to consider saving your efforts on such cause. This is the time expected of you to give a reply to the cashback claim.
To disprove the customer’s claims, you need compelling evidence. Accordingly, you should gather facts and documents that support your interest. If this is impossible, it is wise that you back out.
Final Thoughts
Chargeback management does not require as many resources as you think. What you do need is an organized system to prevent such occurrences. If you follow the detailed steps above, your business is sure to triumph frivolous claims by phony customers.
Sign up with Parselytics today and protect your business!
