Merchant Services and Your Business Success
Today’s business world is not what it was five or even 10 years ago. We’ve seen a dramatic shift in how, when, and where business is done and we’ve also seen a change in what products and services are sold and why.
Ten years ago, most of us likely wouldn’t have imagined ordering a car pick-up with a swipe on our smart phone or ordering a pair of custom-designed running shoes online and having them delivered in three days.
Yes, what we want to buy and how we want to buy it has changed. This is great for anyone who is in the business of selling a product or service. We now have a truly global and connected marketplace. You can run your business from a cabin in northern Canada or on a warm, sunny island in the Caribbean – so long as you can respond to your customers promptly and give them what they want when they want it.
But what does this freedom of movement, sales, flexibility, and diversity mean for how you operate your business? It means you must be technologically savvy, have top-notch customer service skills, understand all the ins-and-outs of merchant services, and be available 24/7.
You were likely aware of all these keys to business operation with the exception of one vital key: merchant services.
Merchant services are the financial services that allow you to accept card-not-present (CNP) transactions. And one key aspect of merchant services is chargeback prevention and representation.
What is a Chargeback?
A chargeback happens when a customer disputes a charge to their credit or debit card. Typically these are charges that were made in a CNP transaction. For example, mobile transactions, Internet sales, kiosk sales, or phone sales.
When a customer disputes a charge, the result is a transaction reversal on the customer’s card. Chargebacks were originally introduced as a method of protecting customers from credit card fraud. But now with more savvy customers and the rise in technology, it is easier for people to file false chargebacks.
What Happens When a Chargeback is Filed?
Typically, your customer won’t contact you. They will immediately contact their card issuing bank and ask for the charge to be reversed. When this happens, you have limited means to make amends with the customer and to prevent the chargeback from happening.
Once the chargeback occurs, the onus is on you to prove that the charge was valid and was authorized. This requires you to provide detailed evidence demonstrating that the customer authorized the charge, was authenticated properly, and ultimately approved the final charge. If you can prove that the chargeback claim is false, the funds are eventually returned to you and the customer is charged for the original transaction.
This is a complicated and time-consuming process. For many businesses, the cost of managing these chargebacks can be overwhelming and requires in-house merchant services experts.
If you’re thinking about your business and it’s bottom line right now, you’re being very proactive. The cost of managing chargebacks and dealing with the associated fees, penalties, and other costs can be challenging for even the most established business.
Protect Your Business with Smarts
We assume that now you’re asking yourself and your colleagues how you can protect your business from fraudulent chargebacks…. well, the best answer is to look outside your organization and take advantage of the kinds of merchant services that Verifi offers.
You might be hesitating here and wondering how much is really involved in chargeback prevention and representation. Well, this is just a sampling of what is required:
- Have an excellent customer service team. When your customers feel they have been treated properly, they are much less likely to file a chargeback. Establishing relationships with your customers is very important (not easy to do with ecommerce and CNP sales). Ensure your customer service team documents every conversation and online transaction with each customer – this is important information that you’ll need in the event of a chargeback.
- Understand and know the four reason codes that a customer can use when filing a chargeback. When a customer files a chargeback, they must include one of four reason codes: technical (an expired card), clerical (duplicate charge), quality (defective product), or fraud (stolen credit card). (You also need to be aware of the different codes used by the major credit card companies.)
- Document each and every sale and order. You are required to have real physical proof that a customer did initiate the purchase, was authenticated properly, authorized the charge, and ultimately approved of the purchase. If there is any piece of information missing here, it can be very difficult to dispute the chargeback.
Now think about your day-to-day business operations… do you have the time and resources available to manage this? Now, along with managing your business, you have to devote time to merchant services and specifically to ensuring you’re protected from chargebacks.
What Can You Do Now?
We want you to do your research. Learn everything you can about chargebacks, merchant services, fraud, payment protection, billings, etc. To do this, browse our website: read our entire Knowledge Base, download our white papers, watch our videos, read about our Solutions – find out what we do and why.
Yes, in an ideal world, you would do it all. But, you need to focus on your core business. And so do we. This is why we focus on your business for you, making sure that you’re protected from fraud and unnecessary costs.
Don’t wait. Act now and make sure that your business is one that we’re all talking about in five and 10 years from now.