Is your chargeback nearing the dreaded 1% mark? How to fix it?

  • 15-June-2020

During the COVID-19 crisis from the past couple of months during the lockdown chargebacks have been severe for several e-commerce merchants. Even during these hard times where there is an economic fall business continues to operate. There are few businesses which have seen higher chargeback for example travel business because people don’t want to risk traveling and get sick another business is sports. Everything has suddenly come to a standstill even sports at least for a while.

There are different reasons why each company is struggling during coronavirus crisis. For few businesses due to supply chain disruption product delivery cannot be achieved on time. Moreover, people have become comfortable staying home and all they need is essentials so everything else is not required for example luxury bags, clothing, footwear etc. Because they don’t even go out to wear them.

Does this situation sound familiar? How can you bring down your chargeback rate as a merchant? This blog will help you get an idea how to go about it.

How e-commerce merchants are affected by COVID-19 crisis?

E-commerce merchants are definitely struggling in this COVID-19 situation like any other business. Supply chain has been effected extremely compared to any other operation in a business.

Lots of businesses are still struggling due to the chaos in production remains. So many goods are struck midway and customers are disputing the charge because they don’t understand that they need to wait for their goods to arrive. Also if they call the customer care they need to wait for hours together on hold for a refund. Because there are limited staff due to lockdown. Also customers are not receiving replies for the emails they are sending resulting them to dispute the charge.

During lockdown is the chargeback rate increased?

Many customers are requesting for cancellations and refund because they only want to spend money on essential items. Due to the pandemic the lifestyle of people has changed drastically. Most of them are comfortable at home and don’t want to spend their money on unnecessary items like luxury clothing, bags, footwear, vanity etc. Also some people have lost jobs or not paid salary for months of lockdown and it is obvious that these people spend less.

There is a high impact on few businesses e.g. subscription-based marketing software. Also travel sector people have limited the visit to website like airline, train, hotel etc. And also fantasy sports. There is temporary halt on sports. However, there is a glimmer of hope for merchants because few soccer league has slowly begun.

What can e-commerce merchants do to fight back the chargebacks?

It is crucial to manage increase in sales and high demand. Inform your customers that due to the pandemic there will be a delay in their orders. Few merchants are flooded with refund requests from their customers. Whatever situation you are in there are few ways to mitigate back chargebacks:

Speak with your logistics company to be prominent on giving delivery confirmation:

Looks like literally everything is delivered to customers doorsteps. And few dishonest customers are taking advantage of the current situation and say they haven’t received the product looking at the delivery volume and dispute the charge. The only way to overcome this situation is maybe ask the logistics company to take a photo of the product when they drop it at customers doorstep.

There is relaxation on chargeback dispute process take advantage of it:

Visa, Mastercard and American express have relaxed chargeback dispute process. The merchant have to submit a proof of delivery and the customers dispute will be invalid.

Have a good communication with your payment processor and acquiring bank:

Payment processors and acquirers know that you are under pressure and understand your situation. If you have a good relationship with your bank they will they will be more helpful.

Make use of anti-fraud tools used by acquirers:

Acquirers will use fraud filters so make such as 3D-secure. When there are so many fraud in place this might be your defense mechanism.

Limit order sizes:

It is a good idea to keep transaction limit so that there is no high value transaction which hurts you bad during a chargeback. In this way at least the impact is much less.

iPaytotal understands the struggle of each and every merchant out there and we will help you overcome the difficulty during this crisis. We believe in making it simple for our merchants. Call us now we are happy to help you..

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