Disputes are inevitable in the world of eCommerce. Though the use of technology and online tools has been integrated into online transactions, there would still be times when errors get along the way. Among these disputes is what we call chargebacks.
In this blog, you will get to know all about a chargeback, what causes eCommerce chargebacks, and how you could avoid them for a smoother and flawless eCommerce experience.
First, let's get to know what is a chargeback?
What is a chargeback?
Chargebacks can be defined as simply a payment dispute. E-commerce chargebacks happen when a card owner experiences conflicts on a transaction and asks his bank/card-issuer to fix it and dispute a specific charge on his account. Disputing payments is somehow one way of protecting consumers from dangerous unauthorized transactions, which can happen, but at the same, can be troublesome.
Another chargeback meaning is when one of your consumers may have filed a dispute of transaction against you. Once they filed it, you will get a notice that a chargeback is pending from your bank. Here, you have the option to accept it or appeal against it on your acquiring bank. If the bank rejects your appeal, the disputed funds are given back to the cardholder. On the other hand, if the bank took your side, all the disputed funds will be given to you. The disputed funds of a business are being primarily held and are only given back to the owner if things are already worked out between the card issuer.
As a business person, learning the anatomy and causes of these errors is essential. Once mishandled, chargebacks can cause a time-consuming and too complicated process that involves dealing with tons of documents and requirements. And what’s worse, it can also lead to a massive downfall in your online business if you don’t have enough idea on how you could handle them.
Chargebacks can cause massive harm to your business which can either be short-term or last for a longer time. For every completed chargeback on transactions you made, you lose revenue from any merchandise you ship or all the services you have provided to an online consumer. Once your chargeback ratio (number of eCommerce chargebacks to total business transactions) is not good, you will either pay a higher processing chargeback fee or lose your online business account entirely. To avoid that from happening, equipping yourself with the best weapon of information is an advantage.
What are the causes of chargebacks?
Chargebacks can occur due to many reasons. To help you understand it more, we listed some of the most causes and reasons for your better view.
1. Frauds in transactions
Frauds in eCommerce transactions are among the most common reasons why consumers file a chargeback against your business. This usually occurs when a customer sees a charge on their card from your business, even if they haven’t bought anything from your online store.
2. Issues about shipping, delivery & pricing process
Faulty delivery and shipping issues can also cause customers to file chargebacks dispute on your business. If they haven’t received any item which has been paid already, it can lead to a chargeback case against you.
3. Unsatisfied view on your product
Consumers tend to become too picky and meticulous in every purchase they made. If they find your product “not suitable” for their taste, it could lead to them filing chargebacks against your online business. Defects on products or errors in item numbers are also among the possible reasons why a consumer files a chargeback from you.
Ways on how to avoid chargebacks
Mishandled chargebacks issue can gives a large impact on your business. Scary, right? But, one thing is for sure, there are various ways how you could help yourself avoid and limit eCommerce chargebacks from ruining your business.
Below are some of the signs you should be aware of to help you avoid getting a chargeback.
1. Bulk orders
Orders that are made in bulks or which seem to be out of what a normal order quantity should be is one red flag of a malicious transaction.
2. Orders for big-ticket/expensive items
This occurs when properly new customers made orders on a specific item that has a significant dollar value.
3. Multiple orders made within a short period
Multiple orders made by a single customer within a short span of time frame may signify an unauthorized card use or another malicious transaction.
4. Different home delivery information and billing addresses
Having a different delivery address information from the billing address provided may be valid in some instances. But, high considerations must still be implemented to avoid conflicts and ensure legitimate card authorization.
5. New customers demanding an overnight or rush delivery of items
Validity checks should always be implemented when it comes to answering rush delivery appeals, specifically, for big-ticket products.
6. Orders made with numerous tries on a single credit card number
Bulk orders made on a single card may signify that the card is not in possession of the real owner and can be an indication of unauthorized fraudulent activity.
Useful tips and tricks you could use to win against a chargeback
Aside from knowing the red flags, Strikingly also gives you this useful tips on how you could prevent yourself from getting in trouble brought by chargebacks.
1. Always provide clear billing and purchasing information on your online website
Doing this will help your customer understand the flow of your transaction clearly. Strikingly allows you to embed Paypal on any part of your website for your customers.
Image taken from Strikingly
2. Always track your shipments
Tracking your delivery helps you keep things on track and avoid delays on the delivery schedule. It can also help you keep your customers updated about their purchases.
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3. Ensure great customer services
Customers love being pampered with attention. For you to avoid getting complaints and chargeback issues, give your all in providing your customers with the best customer service.
4. Screen every transaction made
Screening your transactions before proceeding with payments and billing is one way of ensuring that you are safe from fake buyers. Ensure that you are doing a legitimate transaction before shipping your products.
5. Create a detailed record of transactions
Keeping a record is like keeping proof for future use. Always ensure that you have all your transaction details listed to make it easier for you to find important details once unexpected conflicts happen.
6. Make it easy for customers to reach you
Provide them with reachable contact details so that you can easily respond to their queries. You can do it with Strikingly’s Sign Up form and Add Custom Form. With this feature, you can design your own contact and sign-up form where your customers can fill in to get better access to your website.
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Why it’s safe with Strikingly?
Strikingly is a website builder that seeks a secured and safe eCommerce experience for our users. Upon making your website with Strikingly, you have the option to accept credit cards and debit cards payment securely using Stripe. You can start setting up your Simple Store and created a Stripe account. Then, you can start receiving your payments!
Image taken from Strikingly
Here’s a quick tutorial on how you can start connecting your Stripe account to your Strikingly Simple Store:
1. On your Simple Store settings, select "Payments" on the left menu. Then, select Stripe under the category, Payment Gateway.
2. Select "Connect to Stripe". A new tab will then open for you.
3. If you already have an existing Stripe account, you can immediately log in. If you don't have one, don't worry about it because you can always create a new one.
Quick tip pro-tip: When you create a new Stripe account and you happen to see a message that states, "This account already exists", it means that you might have already created a Stripe account before. If this happens, restart the process and sign in to your account right after.
Also, please take note that all your orders will appear as "Coming Soon" when you don't set up a payment gateway.
As of the moment, the following is the list of Stripe Supported Countries. Check it and see if yours is supported. If not, you got nothing to worry about because Strikingly also partners with Paypal. If you're wondering if is Paypal safe for sellers, it’s definitely a yes! Strikingly works with Paypal in providing a smooth, stress-free flow of transaction process just for you!
- Hong Kong
- New Zealand
- United Kingdom
- United States
Strikingly also allows our users to change their credit/debit card or Paypal accounts any time that they wish. You don't have to worry about the charge applied because Strikingly charges the same card and accounts for all the subscriptions made. This involves audience plans, domains, emails, and premium plans.
You can also easily update your billing information options with Strikingly.
Image taken from Strikingly
As of the moment, Strikingly accepts the following payment methods:
- Debit or credit cards:
- American Express
There would also be instances that your current card has already expired or you want to switch your billing options to the PayPal method for your Strikingly account. You can simply update your billing information by doing these basic steps:
1. Go to your Strikingly Dashboard.
2. Click the "Person" icon on the top right of your dashboard.
3. Select the "Change Billing Info" option.
Image taken from Strikingly
4. Finally fill in your Credit card/Debit card, or use Paypal. After that, you will be redirected to www.paypal.com to log in to your PayPal account.
When you do online business, chargebacks are already inevitable. Different customers/transactions, different experiences. What do you need to do as the master of the game? Simple, equip yourself with the right tools that will help you pass through it. Choose the right partner in gearing up for the online world. Choose the right website builder who knows how to work things out for you - just like Strikingly.
Still got questions? You can chat with us and let's start working together.