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Chargebacks are not something to be underestimated , or swept under the carpet once you have an online business, and are processing online payments. Unfortunately every now and then you may have customers who are dissatisfied with your product or service which you have delivered.
To address this situation customers can either ask for a refund or request a cancellation of the order directly from their credit card company. When they do not engage you , but go directly to the credit card company it is called a “chargeback” request.
Please do your homework ahead of time , have these conversations during your initial negotiation or setup discussions , and find out from your payment processor, bank and payment gateway of any associated costs , chargeback fees or other implications of dealing with chargebacks for your business.
You should pay particular attention to specific regions of the world where there may be an increase in fraudulent online activity . Interactions with customers form these regions should be limited and controlled at all costs . Some businesses do a risk matrix, and dependent on the possibilities or chargebacks or risks of doing business with these individuals , they adjust their payment processing accordingly , and sometimes do not even accept customers or payments from those particular geographic regions.
The other key aspect which online businesses need to be aware of are very clear terms and conditions, and ensure that they are easily accessible for the potential customers to peruse, and agree to. This will ensure that the customer understands clearly what to expect when doing business with your company, and your website.
These chargebacks can not only be costly but also damage the reputation and credibility of your business !! Ignoring these may lead the to the bank or payment processor , not only questioning the ethical and legal aspects of your terms and conditions, and how you are displaying and selling goods to your customers. Furthermore this may lead to them increasing your processing rates , or other actions which may be detrimental to your business.