Using Customer Service to Minimize Chargebacks

I recently made a comment about how merchants can use customer services rules and practices to help manage their chargebacks.  Since I received a couple inquiries on how to go about doing this, here are a few best practices…

Adopt a policy with your customer service of actually servicing your customers (what a shocker!).  Simple enough right?  Be nice to the customer (this by no way means the customer is always right) but by simply being nice and offering alternative options to a customer who has called/emailed your service department you can negate potential chargebacks.

If a customer has taken the time to call or write you, it’s just as likely and possibly even easier for them to call and file a chargeback.  Even more so with the new changes coming down the pipeline from Visa…keep this in mind when dealing with unruly customers.

Have a refund policy… this is actually an often overlooked piece of the chargeback management process. If a customer is unhappy with your product or service and they are unwilling to take a replacement or credit, it’s likely that if they don’t get their money back they will file a chargeback.  So by offering a refund you can prevent this.  I’d much rather offer a refund (even if I don’t feel it’s deserved) than receive a chargeback.  You’ll be out the money anyways and more-so if a chargeback is filed.

At check out clearly state your policies around product returns, refunds and cancellations.  Also include here your stance on fraud, and how you’ll prosecute it to the full extent of the law.  By stating your policies (and allowing for the logical wiggle room) you’ll dissuade some less determined would-be fraudsters from transacting on your site and going somewhere else.

An often overlooked benefit of good to great customer service?  Even if someone did not like the product or service provided if they walk away feeling as though they were treated well there is still a chance they will come back and try to purchase from you in the future.  This however is not the case with a poor product and terrible service.

What are your thoughts?

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