How to Reduce Chargebacks: Understanding Why They Happen is Key


Chargebacks can happen for any number of reasons. Many of us can relate to the experience of not getting quite what we expected when buying a product online. Maybe it’s smaller than we thought or the colour is all wrong, and some of us might be upset enough to contact our credit card issuer and demand our money back. Then the credit card issuer fines the merchant for the chargeback.

When doing business online, you may never be able to reduce your chargeback ratio to zero. However, there are things all merchants can and should be doing to keep that number down. It’s important to consider that each chargeback you receive is from an unsatisfied customer, so the goal of reducing chargebacks is not only to decrease your losses but also to improve overall customer satisfaction.

Whether you’re new to e-commerce or you’ve been online for a while, here are some basic guidelines to follow in order to reduce chargebacks:

  • Be detailed in your descriptions

Product descriptions should do just that – describe. The more details you provide about a product, the more likely it is that your customer will receive exactly what they expected. Think about what your customers really want to know when considering a purchase. While price is important, so too are physical characteristics such as dimensions as well as practical considerations such as when and how the product will be shipped.

  • Be honest with your offers

As the old adage goes, “keep every promise you make and only make promises you can keep”. This is as true online as it is when conducting business face-to-face. If you make special offers or discounts through your website, make sure to follow through. If a customer feels they have been cheated, they will be more likely to contact their card issuer for a refund.

  • Be timely when you ship

This is perhaps the most important suggestion we can make. Most non-fraudulent chargebacks come from customers who feel like they’ve been waiting too long for their product to arrive. When you receive an order, it’s important to stay within the shipping times listed on your website.

  • Be available to chat

It’s important for the customer experience that you are always available if they have any questions, both before and after their purchase. This means offering customer support through as many channels as possible. At DalPay, we’re always here to help with customer inquiries, though many customers will prefer to communicate with you directly. Responding to customers’ questions tells them that you care about their satisfaction post-purchase.

  • Be flexible with refunds

We all want each and every customer who visits our store to leave feeling great about their purchase, but there will always be some customers who, for any number of reasons, request a refund. By honouring their request in a polite and timely manner, you can save them the step of contacting their credit card issuer to initiate a chargeback and save yourself the fee. When a refund request comes through, be sure to follow the refund policy according to DalPay’s Terms.

In addition to these tips, it’s a good idea for all DalPay Merchants to communicate what will appear on customers’ credit card statements. To reduce your chargeback ratio, be sure to notify your customers about what exactly will appear on their credit card statement. By communicating this in advance, you can greatly decrease your chance of incurring chargebacks due to confusion.

How DalPay helps to prevent Chargebacks before they happen

At DalPay, we’re committed to providing you with the tools for success. We’re always happy to answer your customers’ billing questions and we will do everything we can to prevent chargebacks.

We would encourage you to set additional settings in your account’s Seller Menu to restrict the option for customers to enter an alternate shipping address. While we always try to confirm a customer’s billing address through an Address Verification System (AVS), it is important that you pay attention to any fraud warnings related to a particular order. If you’re concerned about a specific transaction, you can always contact us to perform a secondary screening at no additional cost.

Finally, remember that we’re here for you. If you need additional help in preventing or dealing with chargebacks, feel free reach out to a member of our team.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s