Did you know that the average chargeback ratio across all industries is 0.60 percent? If you are running an online store or an e-commerce business then odds are that you’ll eventually need to learn the chargeback definition. You should have a strong grasp of how do chargebacks work.
Unfortunately, there are some people that attempt to commit chargeback fraud. That will harm your business because you lose your goods while also losing the money that the customer owes for them. The good news is that there are ways to learn about the common causes of chargebacks and to get a better read on the chargeback time limit.
The better news is that you’re in the right place to learn those things and then apply them to your small business. Keep reading to learn more.
What Is a Chargeback?
A chargeback is something that occurs when a credit card issuer demands that your e-commerce business should cover the loss of a disputed transaction. This often comes with chargeback fraud that gets committed by consumers that have purchased your goods. Chargeback fraud, combined with deduction problems, is a sure way to keep your business from flourishing.
Causes of Chargebacks
There are multiple things that you can control that will decrease the odds of experiencing chargebacks. A big reason why chargebacks happen is that the customer claims that the item that they purchased was not as it was described. It could be that they’re claiming that the color wasn’t the same as the picture online, or that the item arrived with damage.
The best way to avoid that issue is to ensure that your product descriptions are detailed and correct. You should also make sure that the pictures on your website are accurate from a color, shading, and material standpoint.
If you’re running a business that provides a service and you’re offering a limited free trial then you’ll also increase your odds of getting chargebacks. If customers are required to provide credit card information then odds are that they’ll forget to cancel before the free trial ends. This is a common cause of chargebacks because the customer feels tricked and wants their money back.
Chargeback fraud is another big cause of chargebacks so it is important that you know what does chargeback mean. There are consumers that will place a real order for your products. From there, they will dispute the charge after they receive the item with the hopes that they’ll get it for free.
Others experience buyer’s remorse after making a big purchase. Regardless, you should be clear about your return policies on your e-commerce website. You should also maintain good customer relationships.
Now You Know the Chargeback Definition
Knowing the chargeback definition and having a strong idea of how to do a chargeback is a big part of running an e-commerce business. Make sure that you understand the chargeback time limit and that you’re stating your return policy in a clear way. You should also ensure that your product descriptions and pictures are as accurate as possible.
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