By Jessica Velasco, Published November 11, 2014
Chargebacks instigate profit-losses in nearly all businesses. They are especially prevalent with ecommerce transactions.
Fortunately, many of these financial setbacks are preventable. One of the most beneficial tools for ecommerce chargeback prevention is a top-notch website design.
A Brief Explanation of Chargebacks
If you haven’t experienced a chargeback yet, you might not know what they are. Here is a brief explanation.
A chargeback is a forced credit card refund. Rather than reach out to you for a product exchange or return, the customer contacts the bank instead. By initiating a chargeback, the cardholder is almost guaranteed to get their money back.
A chargeback can be filed for a variety of reasons:
- The goods or services weren’t delivered (or weren’t delivered on time)
- The products or services were poor quality
- You made a mistake during the transaction (like accidently charging the card twice)
- The purchase wasn’t authorized by the cardholder (a criminal might have stolen the account number)
Each chargeback comes with a fee. If you encounter too many chargebacks within a month, the bank will simply close your merchant account. Then, you can’t accept credit cards as a form of payment. And since all ecommerce sales revolve around credit card payments, you’ll have to close up shop.
In order to fight a chargeback and hold on to your profits, you’ll need to provide written documentation that supports your claim. Usually, that is very difficult to do.
That’s why it is so important to prevent chargebacks from happening in the first place.
Updating Your Website
There are various chargeback prevention techniques. Let’s take a look at the ways a simple site redesign could help.
Product Descriptions
One reason customers may file a chargeback is because “goods or services are not as described.”
This chargeback reason code could be assigned because the customer thought they were getting one thing and ended up with another because your descriptions weren’t thorough. Or, the customer might have misinterpreted your explanation.
Check the way you describe your products.
- Do you provide clear, concise, product descriptions?
- Do you share specific information like size, length, width, height, weight, color, construction techniques, and materials used?
Images
After product descriptions, accompanying photographs are the second most important chargeback deterrent.
- Include multiple images, taken from different angles
- Include an image of each available color
- Zoom in on specific details
Contact Information
If customers have a problem with something they purchased, you want them to contact you—not the bank. Make that as easy as possible.
Include your contact information on every page of your website (at least your phone number and email address). Or, you can include a brief form on each page so they don’t have to make a special trip to your “contact us” page to reach you.
Even if you do have your contact essentials on every page, you still need to have a designated “contact us” page. Include as much information as possible. That way, customers can contact you via the method most convenient for them.
- Email address
- Phone number
- Live chat
- Physical address
- Department-specific contacts
- GPS coordinates
You might also want to include a map if you have a brick-and-mortar establishment too.
Lastly, only include your social networks if you truly use them as a form of communication. You might use social media as a marketing tool, but customers use it as a means of contact. Check your accounts frequently and reply to messages you receive.
Shipping
Check the wording regarding your shipping and delivery schedule. Another popular chargeback reason code is “goods or services not delivered.” This also applies to items that arrive later than anticipated.
Differentiate between the date the purchased items will be shipped and when they will arrive. Educate customers about the time it will take to process the order before it can be shipped. Outline the specific delivery timelines for each shipping option.
Make sure you understand Visa chargeback reason code 30; doing so will help ensure you don’t get chargebacks for undelivered items.
Policy Page
Design a thorough, easy-to-understand policy page. Let customers know what is involved in the exchange/return process and how they should initiate it.
Include a link to the policy page in all the product descriptions. Also, include a link to the policy page in the confirmation email you send after the transaction has been made.
Shopping Cart Software
If you don’t already use them, consider adding various chargeback prevention tools to the checkout process. These include:
Operating an online business is risky; half of all ventures close their doors because of chargebacks. Don’t get swept up with the majority. Optimize your ecommerce website design and prevent as many chargebacks as possible.
Screenshots courtesy of Target and Amazon.
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