Tips for Reducing Chargebacks for Cross-border eCommerce Businesses Selling on Websites

Introduction:

‍As online businesses grow, minimizing chargebacks has become a significant challenge for cross-border sellers. Chargebacks not only lead to financial losses but can also harm a company's reputation. This article provides actionable tips to help reduce chargebacks, safeguard your revenue, and enhance customer experience on your webstore.

I. What is a Chargeback?

‍Chargeback refers to the situation where a cardholder disputes a particular transaction on their credit card statement within a certain period of time (typically 180 days) and requests a refund from the bank. Due to the differences between online transactions and face-to-face transactions, regardless of the payment platform used, if a cardholder uses a credit card for payment, such risks cannot be completely avoided.

II. Common Types of Chargebacks

1. Fraudulent Chargebacks:
   • Unauthorized card use: Transactions made without the cardholder’s approval, often due to lost, stolen, or fraudulently used cards.
2. Non-fraudulent Chargebacks:
   • Product not received: The buyer initiates a chargeback if they don’t receive the goods or services they paid for.
   • Product/Service not as described or damaged: Chargebacks occur when the buyer receives an item or service that doesn't match the description or arrives damaged.
   • Refund not processed: A chargeback is filed when the buyer cancels an order and requests a refund, but the seller fails to issue it.

III. Tips for Reducing Chargebacks for Cross-border E-commerce Businesses

1. Customer Verification:
   • Use 3D Secure systems: Tools like Verified by Visa or MasterCard SecureCode help confirm the buyer’s identity.
   • Address Verification System (AVS): Cross-check the customer’s billing address with the one on file for the card.
2. Improve Customer Service:
   • Respond quickly: Ensure customers can easily reach you and receive prompt responses.
   • Provide clear contact details: Make phone numbers and email addresses easy to find on your website.
3. Clear Return Policies:
   • Offer detailed return policies: Ensure customers understand the return terms and procedures.
   • Keep transaction records: Save invoices, confirmation emails, and any communications with customers.
4. Data Security:
   • Use SSL certificates: Ensure your website uses HTTPS to protect payment information.
   • Update security software: Regularly maintain your security systems to close any vulnerabilities.
5. Monitor Unusual Transactions:
   • Use fraud detection tools: Implement systems like Fraud Detection to flag suspicious transactions.
   • Verify large or repeat orders: Double-check transactions involving high-value purchases or frequent repeat orders from the same customer.
6. Accurate Product Descriptions:
   • Provide clear, detailed information: Make sure product descriptions, images, and pricing are accurate and up-to-date.
   • Update stock availability: Inform customers promptly if a product is out of stock.
7. Track Customer Feedback and Reviews:
   • Gather customer feedback: Listen to customer concerns and adjust your service accordingly.
   • Resolve issues quickly: Handle customer complaints and problems in a timely and professional manner.

Minimizing chargebacks is crucial to managing risk and improving customer experience for Cross-border eCommerce Businesses Selling on Webstores. By implementing strategies like customer verification, enhancing customer service, securing data, and monitoring transactions, businesses can protect their revenue and grow sustainably.