How to Prevent Chargebacks
The dreaded chargeback. The bane of any business. Chargebacks are an expected and planned part of running any business. There will always be customers who want to return items, whose packages get lost in the mail, or any other number of issues.
But, what if we told you there was a way you could open up your business to new revenue streams that have eliminated chargebacks? Of course, they’ll always be a reality in business, but there are ways to increase your revenue without adding more risk of chargebacks. We’ll tell you how.
The Chargeback Problem
As we’re sure you know, chargebacks occur when a customer contacts their bank, cardholder, or digital wallet holder, to dispute a charge to their account. Once a customer files a dispute, you’ll get a notice of the chargeback from your acquiring bank.
Your bank will give you the option to accept the chargeback or dispute it. If you accept it, or your appeal to the chargeback isn’t accepted, you’re hit with the cost of the item that was purchased, as well as any chargeback fees your acquiring bank has in place. Obviously, this isn’t ideal.
Types of Chargebacks
There are two main types of chargebacks your business is bound to run into: disputes and fraud attempts.
Customer dispute chargebacks are pretty standard, and you’re bound to get some. Whether a customer’s order never arrived, they received the wrong item, or just decided they didn’t like the item and wanted to return it, these are an expected part of running a business.
Unfortunately, fraud chargebacks are another issue businesses have to deal with, and while they’re budgeted for, they’re certainly not welcome. Criminals will make purchases with a credit or debit card and then falsely claim that they never received their orders.
This fraud can be especially harmful to e-commerce businesses. And it’s not slowing down. Chargeback fraud is rising 20% per year, and many fraudsters who successfully complete a chargeback are expected to do it again within three months.
Unchecked, chargeback fraud can do severe damage to your business, both in the short and the long term. With each completed chargeback, you lose the revenue from the sale, incur the cost of shipping, lose the shipped merchandise or any provided services, as well as more than likely owe a chargeback fee to your acquirer.
If your chargeback ratio gets too high, you may end up paying higher processing fees or losing your merchant account altogether, seriously putting your business’s viability at risk.
How Certain International Digital Wallets Help that Problem
The world is more interconnected than ever before. Opening up your business, no matter how big or small, to international consumers and the revenue streams that come with them. And with those new consumers come new ways to pay, like digital wallets.
Your business may already accept digital wallets like Venmo or PayPal. But those are different from some of the most popular international digital wallets like Alipay or KakaoPay. The most significant difference is that many global digital wallets don’t offer chargebacks.
A transaction using a digital wallet is more like a direct debit transaction. With funds being transferred from bank to bank.
Because many of these international digital wallets don’t allow for chargebacks, adding digital wallets to your current point of sale system or e-commerce site comes with very few risks for your business and a lot of opportunities to increase revenue.
If you’re ready to create new revenue streams for your business and open your products or services up to international consumers, Pockyt can help you.
Pockyt allows you to accept multiple international digital wallets, giving you access to over 2 billion consumers worldwide who prefer making purchases with them.
We will fund the complete integration of our product into your point of sale system, and we only get paid when one of your customers pays you with one of our supported digital wallets. There are no hidden fees, only transparency.
If you’d like to learn more about how we can help you reach more customers, contact our team today.