Selling online requires following best practices to ensure success. At the core of your business is the customer, and being customer-focused significantly improves your chances of long-term success. This article provides actionable suggestions to enhance the customer experience and protect your business. After all, better customer satisfaction often leads to increased customer loyalty and more sales.
Why Reducing Chargebacks Matters
Chargebacks can be especially harmful to small businesses. Unlike large companies with high transaction volumes, small businesses—particularly those with low volume but high-ticket sales—can face severe financial strain from chargeback disputes. The following precautions can help protect your business while ensuring customers have a positive experience.
1. Inform Customers About Delivery Times
Unclear delivery timelines are a common source of dissatisfaction and cancellations. Customers may cancel orders because they expected same-day delivery, only to discover a delay due to payment processing times or other factors.
Example Scenario:
At PayWise, cash payments are applied to accounts immediately, while card payments take up to 2 days for funds to clear with the bank. A customer needing an item urgently might cancel their order if they were not informed of this upfront.
Tip:
Clearly state delivery times during checkout. For instance:
- Cash payments: same day or next business day.
- Bank transfers: 2 business days.
- Card payments: 3 business days.
Transparency eliminates surprises and builds trust.
2. Collect and Retain Customer Information
To protect yourself against chargebacks, gather as much information as possible about the customer and the transaction. When banks review chargeback cases, they assess whether the merchant performed due diligence in verifying the customer’s identity and ensuring the goods or services were delivered in satisfactory condition.
Best Practices:
- Upon delivery, obtain a signature and a copy of the receiver’s ID.
- Use a delivery form (or a copy of the order) that includes a space for the receiver’s signature.
- Take a photo of the receiver’s ID.
- Keep records (e.g., signed forms, ID copies, and delivery dates/times) for at least one year. Chargeback claims can arise months after a transaction.
3. Follow Up on Customer Satisfaction
Ensuring customers are satisfied with their purchase helps prevent disputes. Checking in with customers can also demonstrate your commitment to quality service.
Tip:
Send a WhatsApp message or email 1-2 weeks after delivery to confirm the item met their expectations. Keep a record of their response for at least one year. This can serve as evidence in the event of a dispute where the customer claims they were unsatisfied or the cardholder pronounces he or she is not aware of the transaction.
4. Maintain Transparent and Courteous Communication
Effective communication is crucial for building trust and preventing misunderstandings. Many customer interactions occur via social media or messaging platforms, so it’s essential to document these exchanges.
Best Practices:
- Take screenshots of all communications and save them for at least one year.
- Record key details, such as the customer’s name, how they discovered your service, and any special requests.
- For high-value items, obtain a selfie of the recipient holding their ID to verify identity.
When requesting sensitive information, explain the reason for your policy courteously and professionally. (Do not request card information). Customers are more likely to cooperate when they understand it’s for their protection.
5. Use Fraud Prevention Tools
Leverage technology to detect and prevent fraudulent transactions before they happen.
Recommended Tools:
- IP Geolocation: Verify that the shipping address matches the IP location of the transaction.
- Red Flags to Watch For:
- High-value orders placed without prior customer interaction.
- Multiple rapid purchases from the same account or device.
Many times fraudulent actors use the same card with different names.
For large or unusual orders, contact the customer directly via phone or email to verify their identity and the legitimacy of the transaction.
6. Have a Clear Refund and Chargeback Policy
A clear refund and chargeback policy helps reduce disputes and sets customer expectations. Outline your policies transparently on your website and at the point of purchase.
Best Practices:
- State conditions for refunds and returns (e.g., timeframes, original packaging, and proof of purchase requirements).
- Be upfront about who covers return shipping costs.
- Respond promptly to chargeback claims with accurate documentation, such as proof of delivery or customer communications.
Conclusion
By prioritizing customer experience and taking proactive measures to prevent chargebacks, you can safeguard your business and foster trust with your customers. Transparency, communication, and diligent record-keeping are key to running a successful online store. Remember: satisfied customers are more likely to return, and secure transactions protect your bottom line.
Implement these best practices to create a seamless shopping experience while minimizing risks—and watch your online business thrive.