December 3, 2010
Black Friday and Cyber Monday may be a distant memory for consumers who have moved on to bigger and better sales, but many merchants deal with the headache of returns for weeks and even months to come. With consumers spending more than $45 billion on Black Friday weekend alone (according to the National Retail Federation), returns and subsequently return fraud constitute a major issue for merchants. Last year’s holiday season brought over $2.7 billion in return fraud and this season is expected to be worse. Here are some ways merchants can protect themselves from fraud and chargebacks:
Minimize fraud attempts – Have customers sign receipts and check the signature on the back of the card. For ecommerce merchants, always use an Address Verification Service (AVS) and consider declining orders that do not provide an accurate billing address as well as the security code on the back of the card (called the CVV, Card Verification Value). When shipping goods, make sure to use a service that provides tracking information so you have proof that the product was delivered and signed for.
Know the chargeback policy – A chargeback occurs when a customer disputes a charge on their credit card. The outcome is usually a fee (sometimes hefty, if you’re shopping for a processor now, make sure it’s reasonable) by the processor and the merchant is responsible for paying the customer back, without an actual return of the product. Making sure to understand the merchant account provider’s policies around chargebacks will make it much easier if one occurs: usually the time frame for settling the issue is limited.
Have a chargeback policy – Let’s face it: nobody wants to deal with chargebacks. After knowing your merchant account provider’s policy, it’s important to develop a process in your business around who will handle making sure the chargeback is taken care of, and where paperwork will be stored. Again, developing this ahead of time will make a huge difference.
Make it easy for customers – If a customer claims that they were not aware of certain procedures, it is important to point out that they were clearly stated before the purchase was made. Also, making it easy for a customer to inquire about a purchase will reduce chargebacks. For example, providing an 800 number alongside the purchase in the customer’s statement (called the merchant descriptor) will give them an easy method to research a confusing charge without immediately disputing it. Consider also whether it makes sense to name the company or the product in the merchant descriptor; with which one will the customer be familiar?
Press Photo/Mark Copier : The customer service counter in the Holland Township Target store.
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