10 Ways To Prevent Chargebacks – FastoSafe

10 Expert Tips To Chargeback Prevention in High-Risk Industries

As a business owner, it might be impossible to completely eradicate chargebacks, making your best bet: decrease their occurrence. Since chargebacks come with unexpected and unforeseen costs, taking preventative measures to protect your business become paramount.

Even data shows that merchants might face a whopping $260 billion in losses from 2021 to 2025. In fact in 2021, more than 47% of fraud losses stemmed from remote physical goods purchases, making them the leading cause of online payment fraud, according to a recent study by Juniper Research.

Tip 1 – Stay Ahead with Preventative Tools

The 21^st century world is more dynamic than ever before. And so are ways and means of fraud, making proactiveness your strongest protective shield. So, adapt quickly to emerging technologies by taking advantage of risk mitigation tools and strategies.

Use CRM or other Sales Order tracking tools – Use these tools to keep an eye on your sales patterns. Because unusually large orders or transactions with different billing or shipping details could be a sign of potential fraud. Act promptly when you notice such out-of-place activities to avoid any significant losses later.

Use Payment Processor’s Anti-Fraud features: These tools act as a watchful allies, adding an extra layer of defence against any fraudulent activities. Check with your current payment processor or better is to select the one which offers these in the first place.

Chargeback alerts: One way to avoid friendly frauds is to use chargeback alert systems that notify you of potential issues before they escalate. These automated response programs from card networks are a great way to have notifications pop up on your systems— for instance, Order Insight from Visa and Consumer Clarity from Mastercard.

It’s not easy to tread this shifting-market landscape. So, these prevention tools will act as your guardians, ensuring your business remains resilient during these uncertain times.

Tip 2 – Use Gamified Loyalty Programs for Chargeback Prevention

Introduce loyalty programs tied to transaction history where customers earn rewards based on their purchase behaviour. This will not only assist you in gaining repeat business but also create a positive connection between the customer and your brand. And even if any disputes arise, the loyalty program data can serve as an additional layer of evidence, showcasing a history of satisfied and engaged customers.

A win-win, right?

Here are some additional tips to do it right – Implement a tiered system, give instant updates on points earned, include interactive tasks like reviews or social sharing to keep customers actively involved, etc.

Tip: 3 – Choose Secure Payment Methods:

When it comes to guarding your digital transactions, choosing secure payment method is like putting a reliable lock on your virtual storefront. And you can do so, by adding these into your strategy:

Choose payment processors that follow the PCI DSS standards. It’s like having a digital bodyguard for your customers’ payment details.

Another way is to go for payment methods your customers already trust. A smooth, user-friendly payment process helps avoid mistakes that could lead to chargebacks. You should also be clear about your commitment to security. It’s like telling customers, “Relax, we’ve got it covered,” and can stop worries that might lead to chargebacks.

Lastly, make sure your payment forms are like superheroes—encrypted and ready to defend. This would keep the customer’s information safe from any digital sneak attacks.

Tip – 4: Keep records and obtain proof from customers

To prevent chargebacks, make sure to keep detailed records of the entire customer journey, like order confirmations and shipping info. You know why, Right?

Regularly updating your customers on their orders also shows your transparency in communication and transactions.

For stronger evidence, use electronic signatures and confirmation emails, especially for high-value transactions. Also, make sure you gather signed delivery receipts and document courier tracking, customer IP addresses, and download specifics for digital services.

Internally, set up processes to capture detailed account order history, displaying all transactions. These steps provide solid security against chargebacks as you can showcase participation and proof-of-delivery, especially when a chargeback is more of a fraud.

Tip – 5: Leverage 3rd Party Data to Thwart Stolen Card Fraud

Make the most of third-party services like Fastosafe along-side manual review process.

By using third-party services and an efficient manual review process, you can establish a proper defense mechanism against stolen card fraud and reduce the risk of chargebacks in the long term.

Here’s how:

Real-Time Monitoring: Chargeback preventive tools quickly flag any suspicious activities, allowing room for you to take immediate action to prevent the acceptance of stolen payment card information.

Customized Rules and Parameters: Configure these services as per your business needs. This ensures you have a targeted approach, specifically designed to identify and block potential instances of fraud.

Collaborative Manual Review: Human expertise can also add an extra layer to the analysis, helping you catch subtle signs of fraud that automated tools might miss.

Tip – 6: Enhance Customer Confidence with Rich Product Details

When it comes to chargeback prevention, compelling product presentation is your friend. Craft detailed product descriptions mentioning aspects like size, colour and brand that leave no room for confusion. Use clear, high-quality images taken from different angles that accurately represent what customers can expect to receive.

You can take it a step further by incorporating demo videos. Videos provide a dynamic showcase, giving customers a closer look at the product in action. Haven’t you felt confident ordering something after watching a video instead of only reading descriptions? Your buyer is no different.

Remember, a well-informed customer is less likely to dispute a transaction. So, invest time in creating a visual and descriptive product journey that leaves no room for doubt.

Tip – 7: Ensure Secure Transactions with Advanced Identity Verification

Add an extra layer of security to your transactions by authenticating customer identities through tools like 3D Secure 2.0 (3DS2). This creates a roadblock for unauthorized individuals to make fraudulent purchases and also enhances overall transaction security – protecting you and your customers.

Additionally, use various card network tools such as Address Verification Service (AVS), card security codes (CVV), and Visa Account Updater (VAU) for a more unified approach to identity verification of the purchaser.

You can also combine two or more of these methods to boost accuracy in validating a shopper’s identity. More security means less chances of fraud and more content customers as it makes them feel that they are in safe hands.

Tip – 8: Be clear, transparent and vocal about your policies

Communicate and be transparent about your policies related to cancellation, return, refund, fulfillment, shipping , etc . Using clear, concise, and flexible terms helps in avoiding frustrations and disputes early in the purchasing cycle. Oftentimes, it can aid in solving issues through customer service only without requiring additional means.

Similarly, when managing shipping: share realistic delivery expectations like shipping times, costs, and tracking options. As is often noted that customers tend to be more dissatisfied if there is a delay in delivery and may lead them to assume that the product is either lost or will never arrive. Providing them with correct information and means and modes to pursue if such situations arise, makes them at ease and deters dispute.

Also, try to consistently review and update your policies to align with changing customer needs. This direct approach ensures a pleasing customer experience, reducing the likelihood of chargebacks throughout the settlement process.

Tip – 9: Improve customer service

Make sure your website is a breeze to navigate, and clearly displays contact details—phone numbers, email addresses, etc. Smooth out the path for your shoppers, and watch frustration take a back seat.

You can also add an easy-to-locate FAQs section to your website. Think of it as your site’s own trouble-shooter—ready to solve common questions and save the day. This way, customers can find answers without needing to reach out for support.

Empower and train your customer service team to be the go-to experts—knowledgeable, empathetic, and proactive. Provide them with the tools and information they need to handle customer concerns effectively.

Try opting for a ticketing or tracking system for customer inquiries. It’s like having a personal assistant to keep things organized. No cracks for concerns to slip through means fewer chances of chargebacks.

Because when customers are well-informed, they’re less likely to bump into issues that lead to chargeback requests.

Tip – 10: Use detailed billing descriptors

Use the power of clear billing descriptors on customer statements. Keep it simple yet specific. Use your business name along with a brief hint about what you offer.

For instance, instead of just “Sara’s Boutique,” try “Chic Fashion – Sara.” It’s like a mini business card on their statement, making it crystal clear what the charge is for.

Now, here’s another sneaky tip: in fields like ‘city,’ drop a little reminder bomb for your customers. If your business is online, throw in your website address. For local stores, pop in the town or post/zip code. This trick can jog memories and cut down on those “I don’t recognize this” chargebacks.

For added reassurance: you can also include essential details like order numbers or product/service identifiers within the descriptor.

To make it more solid, provide customers with detailed receipts or confirmation emails that mirror the billing descriptor. This extra layer of documentation will also act as an evidence in the event of a chargeback issue.