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7 Essential E-Commerce Tools to Avoid a Chargeback

Updated on December 20, 2011
7 Essential E-commerce Tools to Easily Avoid a Chargeback.
7 Essential E-commerce Tools to Easily Avoid a Chargeback.

In E-Commerce credit card processing a chargeback can be one of the most frustrating and unnecessary battles that merchants encounter on a regular basis. Sometimes the best defense is to have a well planned offense by designing a well thought out e commerce website that will actually help you avoid the chargeback conflict to begin with.

The key to any good relationship is clear communication and in business if you clearly communicate your policies and procedures you will nurture a lasting relationship with your consumers. We have all heard that it is much more expensive attain a new client than it is keep a happy one. Today that rings especially true since the minute someone has a negative experience they first jump on Twitter, FaceBook, Google+, or any other means of social media to vent their frustration. Shortly after venting many consumer will get straight on the phone to their credit card company and begin the chargeback process. This can be a very frustrating and expensive for the business owner, the consumer, and the credit card processing company. So here are 7 items that you can easily incorporate into your e-commerce website

Clear communication is the key to avoiding the fees and frustration of a chargeback.
Clear communication is the key to avoiding the fees and frustration of a chargeback.

1. Prominently display your return or cancellation policy to avoid a chargeback.

Most e-commerce businesses have a cancellation or return policy, however, the challenge comes from the fact that most of these policies are business friendly and NOT consumer friendly. Most credit merchant services card processing companies will require a cancellation/return policy for your site to be compliant.

A properly disclosed and thoughtful return or cancellation policy that keeps the customers’ satisfaction in mind is incredibly important. Put some thought and time into your policy and make easy to find by your customers prior to any purchase by placing clear links on all pages of your site. This way your consumer can easily navigate to it, read it, and confidently shop on your site. When your customer “checks out” they should also be prompted with the policy and confirm their acknowledgement and agreement to it before submitting their credit card payment. In addition your confirmation email too should contain the cancellation and return policy.

2. Provide detailed and accurate product descriptions to reduce chargeback disputes.

We all want to sell our wares but be sure to never over embellish the description of the products and services you are selling as this will create unrealistic consumer expectations that can lead to a chargeback. So provide accurate information and include detailed photos if applicable. This will save you a lot of time on the phone with your merchant services credit card processing company and money from chargeback fees. If your product descriptions are accurate your customer will also have a pleasurable experience and look forward to shopping with you again.

3. Shipping cost can trigger a chargeback

To avoid headaches make your shipping policy transparent and easy to find. As with your cancellation/return policy make sure to provide prominent links to your shipping policy that spells out all options, charges, and timeframes clearly. This way the consumer knows what to expect upon checkout and is less likely to dispute shipping charges that were not clearly disclosed.

Avoid the dreaded chargeback by having a customer service line.
Avoid the dreaded chargeback by having a customer service line.

4. Direct Customer Service will keep you off the phone with your credit card processor.

Not only are e-commerce customers leery of doing business with a website that provides no way to directly contact the business but it also makes them more likely to register a chargeback complaint in the event they are dissatisfied. So it is highly recommended that you include a clear concise “contact us” page that provides the customer with multiple ways to contact you or your customer service staff. Having a phone number clearly displayed on your home page and throughout the website will build consumer confidence and lower chargeback complaints. Make sure that the link to this page is prominently displayed on your home page. This will not only make your e-commerce site more inviting but it will allow the customer to easily contact you to handle any issues before they just decide to call the credit card company.

5. Disclose your billing practices to avoid credit card processing headaches

Making sure that your customers clearly understand how they are going to be billed and charged will go a long way to avoiding a chargeback. Make sure your customers are aware of when their credit card will be charged, how the charge will appear on their credit card statement, and a contact number if they have any questions. This disclosure should be presented on a printable confirmation page as well as sent with the customers confirmation email. This way if the email is not received the customer has a reference point. By properly disclosing your billing practices once again consumers can purchase with confidence and will recognize the charge on their billing statement at month’s end which will reduce confusion that could lead to a chargeback.

A merchant services chargeback can be avoided by disclosing where in the word you do business...
A merchant services chargeback can be avoided by disclosing where in the word you do business...

6. Currency and Country of Origin

It is important that the appropriate currency for which you will collect your customers credit card payment as well as where their item is originating from is very important in your efforts to prevent a chargeback. Many e-commerce business owners forget that when they begin doing business on the internet that there site may be viewed by people from just about anywhere. If you get an order from another country it is important that the customer knows what currency you are collecting as price they are paying can be very different after the exchange rate is calculated. In addition international shipping can be cost prohibitive and unreliable. Lost mail is a common source of charge backs. So disclosing your country of origin and preferred billing currency will alleviate any confusion that could lead to a chargeback and credit consumer confidence.

7. Chargeback as a result of recurring billing

Many online e-commerce sites sell items that are shipped on a regular basis and automatically billed to the customer. The problem comes when consumers either forget they ever signed up for automatic shipments or forgot to budget for them so when they see the charge the dispute it. The best way to solve this problem it is to implement an automated system that notifies the consumer of the fact that they their shipment is coming up and that they will be billed. This will provide the consumer notification and time to cancel if necessary as well as remind them that the charge they are going to see is something that they agreed to. Any business that utilizes automated billing should also make sure that there is an additional agreement/acknowledgement in the check out process requiring an acknowledgement and that the auto billing disclosure is presented in the confirmation page as well as the confirmation email.

With this short essential list you can drastically decrease the amount of time and money that your e-commerce website spends fighting chargebacks while at the same time nurturing a loyal customer base who will recommend your site to others. This will not only increase your sales but reduce the cost and frustration of fighting chargebacks with your merchant services and credit card processing.

If you have any credit card processing merchant services questions or to get the most competitive credit card processing rates and service contact the merchant doctor for all your merchant services needs.


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