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Credit Card Processing: 4 Ways To Fight Back Against Fraudulent Chargebacks and Dishonest Customers

by Trisha Echols     Mary Rose, who owns a toy store and an online shop, subscribed to credit card processing service so that she could accept credit card payments. For her, it was the best decision she ever made for her business. In just two weeks after getting the service, her sales went up by 20%.     But to her dismay, she also incurred a number of chargebacks. One customer disputed the credit card charge on the ground that he did not receive the delivery. Another claimed that the toys she ordered few days ago arrived in bad condition. There were also customers who said that they were dissatisfied with the product.     Of course,these claims were false. Mary Rose insist only in dealing with the highest product quality. And she also contracted a legitimate and responsible delivery courier. Her chargebacks occurred not because of any negligence on her part.     She was just victimized by dishonest customers who like getting items without paying for them.     To minimize chargebacks, experts gives the following advice: <ol><li>USE ADDRESS VERIFICATION SERVICE ( AVS) Always activate AVS on each order. Basically, this means that you, as the merchant, should ensure that the billing address of the credit card holder should match with his delivery address. It's that simple. You will get a good chance of reducing fraudulent if you always use Address Verification Service. </li><li>ASK FOR CARD SECURITY CODE Also called CVV, this is basically the first three digit security codes found on most credit cards. Only legitimate credit cards have security codes; fake ones don't. You lessen the chances of a chargebacks if you always ask for the CVV. </li><li>GET DELIVERY SIGNATURES Instruct your courier to get delivery signatures from customers. The shipping company should not deliver the product to a particular address if the customer will not sign the delivery receipt. Even with these stringent security measures in place, there are still dishonest customers who will file chargebacks against you. Here's some proven strategy to deal with them: </li></ol> A.) FOR THOSE WHO CLAIM THAT THEY DID NOT RECEIVE THE ITEMS THEY ORDER     This is very easy. Just furnish a copy of delivery signature, date of delivery, positive AVS identification, and receipts of the transaction. With all these proofs, the ruling will be guaranteed in your favor. B.) FOR THOSE WHO CLAIM THAT THE GOODS ARRIVED IN POOR CONDITION     Furnish copies of the usual transaction-related receipts. Also furnish a copy of your return policy or refund where it clearly states that customers will get their refund on condition that they return the product in within a designated period upon receipt of delivery. Some customers claim that the goods arrive in bad condition yet they continue to keep the product. You should never tolerate this type of flagrant dishonesty. If they fail to return the product , then it implies they are happy with it. <ol><li>FOR THOSE PERSISTENT FRAUDULENT CHARGEBACKS There are occasions when a dishonest costumer keeps the item and still initiates a chargebacks. You show valid proof of transactions but the bank rules against your favor. You feel disappointed but don't give up. You can still recoup your losses and get your money back. Here's how: a. Send a demand letter with an accompanying receipt directly to the customer. b.Your demand letter should state that the customer had fraudulently initiated a costly chargeback which result to losses in your part. In addition, notify the customer that they have 30 days to pay you the full amount. After that, include a clause which states that you will place their delinquent accounts to collection agency which, in turn, will report to credit rating bureaus. The delinquent account will give these fraudulent customers a dismal credit rating. A negative credit rating will adversely affect the customers' credit card financial transactions in the future. c. Most customers will immediately send you a full payment by check. d. In rare instance that a fraudulent customer still refuse to pay, just relax and bid your time. Sooner or later, that customer will be compelled to settle his account with you. </li></ol>     A word of caution, though. Be sure you determine fraudulent chargebacks against honest ones. If you discover the error to be on your part, then go out of your way and do your best to appease the affected customer. Give him additional freebies, if need be. Treat her to a spa, to free dinner, or her family to a theme park vacation.     In this age of cut-throat competition, this is the only way to earn the patronage and respect from your customers. ( Trisha Echols currently is a long-time financial consultant with established consultancy offices in Amsterdam, Halifax, Malaysia and other key cities. Her clients belong to the top 500 companies in England and in the United States. She does lectures on strategic business practices and also writes for various magazines on business matters.) <a href="http://www.onlywire.com/submit?u=http://www.creditcardprocessingexperts.com/credit_card_processing_4_ways_to_fight_back_against_chargebacks_and_dishonest_customers.html;t=credit%20card%20processing;tags=credit%20card%20processing" target="_blank" title="Add this Article to Onlywire"><img src="http://www.onlywire.com/i/onlywire.ico" alt="" />Add to Onlywire!</a>

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