Chargebacks can be bad news for your clients. Not only are the rules slanted in favor of the customer, but they can also end up being very costly.
Any time your client is hit with a chargeback, there’s an associated fee of $25. If the chargeback turns out in favor of the customer, your client is responsible for paying back not only the original purchase but the fee as well. If the chargeback is ruled in favor of the merchant, the $25 fee still applies.
The Three Primary Causes
There are three primary causes for cardholder disputes, and each is something your clients should be made familiar with if they have an established credit card processing account.
Misrepresentation of the product, or of services. Your clients should accurately represent what it is they’re selling in order to avoid the risk of chargeback.
Your merchant’s DBA isn’t recognized on the customer’s statement. Ensure your clients know that their DBA should bear some resemblance to the goods they’re selling. This can cut back the instances of customers assuming they’ve had their credit card information stolen.
Unclear or unfair refund and exchange policies. It pays to be lenient with refunds, as failure to do so could result in a costly chargeback situation.