Two Ways to Avoid Chargebacks to Your Merchant Account
Posted on January 19, 2008 - Filed Under Business |
Whether you’re an e-retailer or sell from a brick and mortar store, you’ve got to be able to accept credit cards for payment. Although credit cards are convenient and make impulse purchases possible for consumers, they do have their downside for merchants. All businesses want to avoid chargebacks to their merchant accounts.
A chargeback occurs when a credit card transaction is reversed and the funds from that transaction are deducted from the merchant’s account. There are many reasons chargebacks occur. Chargebacks may occur due to bank errors, merchant errors, fraud or another reason. Merchants can avoid or drastically limit at least two types of chargebacks.
No matter what bank your merchant account is associated with, it has rules regarding credit card payment processing that must be strictly adhered to if you want to avoid chargebacks. Banks can and will chargeback payments that are not processed in accordance with their rules. Be sure you read and fully understand these procedures when you first set up your merchant account.
Customer disputes are another source of chargebacks merchants can control. It is almost always to a merchant’s advantage to process a return in the event of a dispute in order to avoid a chargeback. Too many chargebacks can put your merchant account at risk for cancellation.
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