Due to their elevated price point, high-ticket items are particularly vulnerable to chargebacks. These occur when customers dispute the charge when it appears on their bill and result in loss of money and time for the merchant. While you will never be able to avoid these fund reversals altogether, the following strategies will help to protect against chargebacks.
1. Implement strong security tools
Particularly for expensive purchases, you cannot be content with simply obtaining a customer’s credit card number and expiration date. In addition, you need to implement extra verification strategies. These include using Address Verification Service (AVS) and asking for card verification value (CVV). Doing so ensures that the billing address provided by the customer matches the one on the account with the credit card issuer and proves that the buyer has the physical card.
An extra layer of data safety for big-ticket sales can be obtained with 3-D Secure (3DS) authentication. With this precaution in place, customers may be asked to complete an additional verification step with their bank by entering a password or providing biometric authentication. Once you bring 3-D Secure into your operations, liability for the chargeback shifts from you to the issuing bank.
Finally, it makes sense to institute a manual review process for high-dollar purchases. Look for red flags, including mismatched shipping and billing addresses, unusual mailing addresses, or orders placed from a different location. If you spot something suspicious, one phone call can often clear up any confusion.
2. Document and communicate
An extended history of losing chargeback disputes can have negative consequences, including higher fees and even account suspension or closure. The best defense is to present all of your evidence in a way that is transparent and well-documented from start to finish.
To that end, meticulously record all details, such as date and time of purchase, customer’s IP address, product description, and information about communications. Any business selling high-ticket items should require a signature upon delivery. This provides irrefutable evidence that the customer has received the product, making it impossible for someone to claim that the item never arrived as a reason for the chargeback request.
Another frequent source of disputes stems from a claim that the charge was not recognized. To fight this, create refund and return policies that are clear and prominently displayed. Require that customers agree to them at check-out. At every step of the shipping process, send an automated confirmation email. Giving regular updates demonstrates that you have been transparent throughout the process.
3. Provide high-caliber customer service
Sometimes customers dispute a charge if they are dissatisfied with a product or service and have found it difficult or impossible to resolve the situation directly with you. Your best recourse in these instances is to offer knowledgeable, prompt customer service via numerous channels, including email, phone, SMS message, and live chat. Although the human touch is preferable, also consider investing in a chatbot that can answer basic questions as soon as they come in and triage more complex concerns to your staff.
When you do receive complaints, address them immediately, referring back to your transparent and prominently displayed policies. Often, this immediate, client-focused response keeps a chargeback from happening in the first place. If the shopper chooses to proceed with the dispute, you'll have a solid body of evidence demonstrating your efforts to resolve the issue. This significantly increases your chances of a favorable outcome.
Chargebacks cost money, lead to stress, and can damage your reputation. The good news is that you can take action to reduce their numbers. Taking these steps will protect your company, save you money, and lead to happier customers.
