Yesterday, I wrote about a WSJ article on charge-back related fraud.
Later on, it occurred to me that some of the charge-backs by the customers may be unintentional, caused by the customer not recognizing the vendor name / transaction in the credit card statement. One of the stories in the article hints at such a possibility.
…two customers have asked for refunds when they claimed that charges on their credit cards didn’t belong to them. When he pointed to their IP address, both customers later discovered someone else in the household had made the order and allowed the charge to go through…
37signals, for example, claims to have reduced chargebacks by 30% just by making it easy for the customer to recognize the charge.
When someone buys something from us, this line item shows up on their credit card statement:
37signals-charge.com 800.xxx.xxxx IL
Visiting that URL takes you to this page where we explain the charge, the products, some suggestions if you don’t recognize the products, and a link to our billing support form someone needs additional help.
Here is an interesting article from Christian Holst on how to implement the 37signals solution for your webstore. The most interesting aspect of this solution is that it will cost you an afternoon of work and $10
Absolutely no reason to not implement this idea for your web-store.
Related Articles:
- 35% of fraud-related charges are charge backs
- Badcustomer.com – Legitimate? Appropriate?
Tags:37signals·charge-backs·ecommerce·fraud·save money·Webstore
Wall Street Journal reports.
…customers contest a charge on their credit card, often claiming that the item was never delivered or they never bought it. Credit card companies charge merchants a fine—typically up to $100 per chargeback—which can be costly when coupled with the lost sale and the lost product…
…There are people who make a living with refunds…
…BadCustomer.com, a site that acts as an intermediary for customer disputes. Business owners enter credit card numbers of those who have done a chargeback in the past, then cashiers can search the site’s database to check if the card has had a chargeback at that store or surrounding stores, and choose to refuse the card. … Customers on the list can call BadCustomer.com to explain why they did the chargeback and have an opportunity to remove their card from the database.
Other companies sell similar solutions. Ignify Inc., in Cerritos Calif., offers shopping-cart software for online vendors with a back-end database that puts orders on hold if they have red flags, such as past chargebacks…
While the statistics suggest that 35% of fraud-related charges are charge backs, it is important for small businesses to NOT go all out with strict return policies. Most of the small business owners that I have interacted with have strict return policies, but they are also open to returns beyond the return period if you can convince them of a genuine case. Small businesses, particularly brick and mortar small businesses, often thrive on the relationships they have with the customer community. It is important to keep that in mind while deciding on strict processes.
My advice is to establish a strict return policy that you can invoke when needed, but be flexible with specific situations.
Related Articles:
- Spend $10 and achieve up to 30% reduction in charge backs
- Badcustomer.com – Legitimate? Appropriate?
Tags:customer service·ecommerce·fraud·relationships·returns policy