Chargebacks, those transactions that are under dispute, can be very costly for merchants. In most cases, merchants lose the goods or services in question, and incur significant fees and penalties. Merchants that accumulate a substantial amount of chargebacks will also damage their reputation with financial institutions. To maintain a good reputation with both consumers and banks, merchants, particularly those with low transaction volumes, need to eliminate chargebacks.
Initially, chargebacks may seem to be a cost of doing business, but there are many precautions that merchants can take to ensure that they don’t suffer significant financial losses. Issuing banks also consistently monitor chargebacks, and are adept at identifying high-risk merchants. Those merchants with low transaction volumes are in danger, because one chargeback will appear more significant to the issuing bank than it would for a merchant with higher transaction volumes.
Merchants that process fewer transactions, but accrue a significant number of chargebacks will put their consumers’ future orders at risk. After an issuing bank classifies a merchant as high-risk, it’s increasingly likely that they will see a higher rate of false positives, legitimate transactions that are declined, on their website.
In trying to eliminate chargebacks, merchants must think of their consumers. Whether it’s implementing a clear, understandable checkout process or establishing and maintaining a sterling reputation with respect to customer service, it’s important to keep the consumer happy.
One of the best ways to keep your consumers happy, and prevent chargebacks is to eliminate fraud on your website. With your One Connection to Cardinal, you can stop fraud, and more importantly, keep consumers happy and maintain a good reputation with all issuing banks. Connect with us to learn more!