In a recent post we talked about chargebacks and how scary they can be, especially for subscription or recurring based businesses (click here if you missed this post). In that article we looked at what chargebacks are, and some good tips to preventing them.
Since this is such an important topic for business who sell online and particularly those with a recurring payment model, we thought we’d go a little bit deeper into how you can protect yourself from chargebacks.
Make sure you have a refund policy and that it’s easy to find.
If you sell online, make sure you state somewhere on your website what your refund policy is terms that are clear and easy to understand. AND make sure it’s easy for your customers to find! No matter how great it is, if people can’t find it, it’s not worth much.
Many companies (Fusebill included) have a link to their refund policy in their footer which appears on every page of their website.
Your refund policy should let your customers know what they are agreeing to before they buy your product or service. For example: if your policy is “no refunds,” the customer who knows this is much less likely to try to get a refund because they knew this before they purchased. On the other hand, customers who don’t know of your “no refunds” policy may try to get one – which could easily end with you facing a chargeback.
Having a refund policy clearly displayed on your website can also help you dispute a chargeback that occurred because a customer wanted a refund that you did not provide (because of your no refund policy). In that case you’d be able to show that it is indeed on your website and the customer should have been aware.
Only ship products after verifying the billing address.
If you sell actual products (as opposed to services) make sure to verify the billing address before you send it, and use a shipping company that verifies delivery. People committing fraud will rarely have their purchases shipped to the address of the credit card they’ve stolen. If you only sell to customers who provide the same address for billing and shipping, you can usually be sure someone has not used a stolen card to make the purchase.
However, since this can limit your customers (for example many people ship to their work or send things they buy as gifts to another address) you can also use a shipper that verifies delivery. This means they only hand over the package to a person (sometimes requiring a signature) as opposed to leaving the package in a mail box. If there is a chargeback, you can use the delivery verification as evidence that the product was delivered.
Both of these tips are very easy for your business to implement and can save you a lot of time and money when it comes to preventing and defending yourself from chargebacks.