What can I do to avoid charge backs?
Telephone/Mail order and e-commerce orders may have a higher risk for chargeback’s if you don't follow some of the guidelines for accepting Card Not Present transactions. The fact that you obtained an Authorization approval number does not mean that the transaction is a guarantee of payment. The authorization only tells you that the card is a valid credit card and that there is enough funds remaining on the card for the amount of the transaction.
The following are suggestions to reduce chargeback’s relating to these particular transactions:
1. Authorize all transactions regardless of the amount.
2. Establish an in house system for tracking "problem credit card accounts" i.e. accounts that have experienced chargeback’s in the past, for future cross-reference.
3. Only bill the customer for merchandise that has been shipped. Obtain an authorization and once the product or service is provided, only then should you complete the sale.
4. Keep detailed records of all order forms, shipment slips, delivery receipts, and customer information such as address, telephone number, delivery signature, pertinent invoices, and e-mail address.
5. Be wary of "transient" shipping addresses for individuals, i.e. motels, PO Boxes etc.
6. Indicate clearly on the sales documents whether the transaction occurred over the phone, by mail or over the Internet.
7. All clients must be aware of the terms and conditions specially Refund/Cancellation policy at the time of purchase and it should be signed by the client.
8. Credit your customers' account immediately if they have returned the merchandise or are disputing the charge.
9. Do address verification on suspicious orders, by calling the customer to confirm the order, and always send an email to notify the customer of the order.
10. Whenever possible, ship your products with a courier that can provide you with a signature for proof of delivery.