In today’s digital landscape, it becomes necessary for online retailers to accept credit cards if they want to thrive and keep up with their competitors. Providing a way for your customers to pay with plastic shows that you care about their convenience, you’re flexible in your payment options and you stay abreast of the latest technological trends.
The downside of this, however, is that chargeback abuse can occur when credit cards are used. Dishonest consumers may engage in this growing cyber crime to get out of paying for their purchases. This may take the form of using stolen credit cards to pay for products to initiating false chargebacks for merchandise they claim was never received. In one case, also known as “friendly fraud,” a thief tried to get a refund for a pricy camcorder from an online retailer of photography equipment, but returned a box full of used power cords instead of the camera. Needless to say, his deception cost him in the long run.
Companies have to safeguard against these cyber crimes or else they may get doubly penalized: once when they lose the revenue from a sale and then again when they are hit with a chargeback fee. There may also be extra labor costs involved if an investigation is launched for the disputed charges.
In many cases of fraud, it will come down to your word against the buyer’s. There are several things you can do to battle deceptive chargebacks. Make sure to provide accurate descriptions and photos of merchandise on your website. These clear images can help prevent a chargeback due to a customer ordering the wrong product. Similar to the way some Mom and Pop stores post names of consumers who write bad checks, you can check databases for blacklisted customers who have swindled retailers out of money and merchandise.
Don’t allow fraudulent chargebacks to eat into your bottom line. Take measures today to protect your small business.