Most merchants quiver at the mention of a chargeback. Here at Instabill, we pride ourselves on helping you prevent them. Your acquiring bank may terminate your merchant account if you have too many chargebacks–and your success is important to us!
Let’s start with the definition of a chargeback. In the words of Instabill’s Customer Service Specialist Peggy, a chargeback is “the return of funds to a consumer, forcibly initiated by the consumer’s credit card issuing bank.” In other words, if a merchant failed to render services purchased by a customer, then the customer’s credit card company or bank will recover the funds from the merchant’s acquiring bank. However, we understand this is not always the case. Some people have buyer’s remorse—especially with high-ticket items.
As an Instabill Merchant Account Manager, I work with merchants in a variety of industries and learn about the troubles they have with chargebacks. Mail order/telephone order (MOTO) merchants who offer services tend to have a more difficult time preventing chargebacks–there’s no tangible product to track. Examples of MOTO industries providing a service include debt consolidation, financial consulting, psychic readings, and extended warranties.
Before you charge your customers’ debit or credit card, require them to:
Once they have provided you with this information, it’s safe to pre-authorize the transaction for the agreed upon amount, and then render services. What customer would request a chargeback on a purchase if they provided you with a signature and identification?
Instabill also recommends that you require your customers to provide a signature and identification on transactions more than $1,000. For transactions more than $3,000, we suggest merchants require their customers to pay with a wire transfer. A wire transfer is much safer and nearly impossible to charge back.
For more information on chargeback prevention, contact us online or call 1-800-318-2713 today.