How to Avoid Chargebacks and Protect Your Business

What Is a Chargeback?

A chargeback is a payment reversal initiated by the customer’s bank after they dispute a charge on their account.

Types of Chargebacks:

• Fraudulent Chargebacks: Unauthorized transactions where the cardholder’s information was stolen.
• Friendly Fraud: Customers dispute legitimate transactions out of confusion or dishonesty.
• Merchant Errors: Mistakes such as double charging, failure to deliver goods, or unclear billing descriptions.
• Service Disputes: Customers dissatisfied with a product or service who request a refund via their bank instead of the merchant.

✅ 2Accept Tip: Understanding the root causes of chargebacks helps you develop a more effective prevention strategy.

Why Chargebacks Are Dangerous for Your Business

Excessive chargebacks can cause:

• ❌ Frozen Merchant Accounts: Processors may freeze or suspend your account if chargebacks exceed 2%.
• ❌ Increased Processing Fees: A higher chargeback ratio may lead to increased transaction fees.
• ❌ Reputational Damage: Excessive disputes can damage your brand’s reputation.
• ❌ Revenue Loss: Businesses may lose both the revenue from the sale and incur chargeback fees.

✅ 2Accept’s Solution: We offer chargeback prevention tools and support to protect your revenue and business integrity.

Top Strategies to Avoid Chargebacks and Protect Your Business

1. Implement a Clear Return & Refund Policy

A transparent refund and return policy helps customers understand their rights and reduces disputes.

✅ Best Practices:

• Clearly display your refund policy on your website.
• Send a copy of the policy with the purchase confirmation email.
• Train staff to explain return terms during transactions.

✅ 2Accept Benefit: We help businesses customize their refund policies to reduce disputes.

2. Use Accurate Product Descriptions and Billing Statements

Unclear billing descriptors and misleading product descriptions often lead to chargebacks.

✅ Best Practices:

• Ensure accurate product descriptions with clear images.
• Use recognizable billing descriptors to avoid confusion on statements.
• Provide detailed invoices and order confirmations after every purchase.

✅ 2Accept Solution: Our platform helps customize billing descriptors for clarity and accuracy.

3. Leverage Fraud Prevention Tools

Fraudulent transactions are a leading cause of chargebacks, especially in high-risk industries.

✅ Fraud Prevention Tools to Implement:

• Address Verification System (AVS): Matches the billing address with the cardholder's data.
• CVV Verification: Requires the 3-digit security code to validate transactions.
• AI Fraud Detection: Real-time monitoring for suspicious activity.

✅ 2Accept’s Advantage: We offer built-in fraud prevention tools for all our clients.

4. Improve Customer Communication and Support

Most chargebacks can be avoided by resolving customer concerns before they escalate.

✅ Best Practices:

• Offer 24/7 customer support for transaction inquiries.
• Provide a help desk or FAQ section on your website.
• Respond quickly to customer complaints.

✅ 2Accept Benefit: Our white-glove support team helps you manage customer concerns effectively.

5. Use Digital Receipts and Proof of Delivery

Clear documentation can help you dispute chargebacks successfully when they occur.

✅ Best Practices:

• Provide email receipts for every purchase.
• Use delivery confirmation with tracking numbers.
• Capture electronic signatures for high-value transactions.

✅ 2Accept Support: Our payment gateway includes automated receipt generation for better record-keeping.

6. Monitor Transaction Patterns for Suspicious Activity

Proactively identifying unusual transaction patterns can help prevent fraud-related chargebacks.

✅ Best Practices:

• Monitor for multiple rapid purchases from the same IP address.
• Flag transactions with mismatched billing and shipping addresses.
• Set limits on high-value transactions.

✅ 2Accept’s Advanced Tools: We offer real-time fraud monitoring and alert systems.

7. Implement Chargeback Alerts and Management Tools

Chargeback alerts notify you when a dispute is initiated, allowing early intervention.

✅ Best Practices:

• Enroll in chargeback alert programs like Ethoca and Verifi.
• Respond to disputes immediately.
• Gather evidence for dispute representation.

✅ 2Accept Benefit: We offer automated chargeback alerts and professional dispute support.

What to Do If a Chargeback Occurs?

Step 1: Review the Dispute Notification

Examine the reason code and details provided by the issuing bank.

Step 2: Gather Supporting Evidence

Collect documentation such as:

• Transaction records
• Product delivery confirmations
• Communication logs

Step 3: Respond Promptly

Submit your dispute response within the required time frame.

Step 4: Implement Prevention Measures

Learn from the dispute to improve your payment policies.

✅ 2Accept Assistance: Our chargeback management platform guides you through the dispute process effectively.

Common Chargeback Challenges (and How 2Accept Solves Them)

Problem 1: High Chargeback Ratios Resulting in Account Freezes
Solution: Proactive chargeback monitoring and fraud detection tools to keep ratios below 2%.

Problem 2: Unclear Billing Descriptors Causing Disputes
Solution: Customizable billing statements for clarity and customer recognition.

Problem 3: Lack of Fraud Prevention Tools Leading to Repeated Chargebacks
Solution: PCI-compliant fraud prevention tools included in all 2Accept payment gateways.

Why Choose 2Accept for Chargeback Protection?

2Accept provides comprehensive solutions designed to prevent and manage chargebacks effectively:

• ✅ Advanced Chargeback Prevention Tools: Real-time monitoring and alerts.
• ✅ Tailored for High-Risk Industries: Expertise in CBD, firearms, adult industry, and more.
• ✅ 24/7 White-Glove Support: Dedicated fraud and chargeback prevention specialists.
• ✅ PCI Compliance & Data Security: Full compliance with industry security standards.
• ✅ Fast Approval Process: Get started in as little as 24-48 hours.