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Your Chargeback Rate: What’s the Norm?

Why should an e-businessman work on lowering the chargeback level? Why keep track of the whole thing on a regular basis, anyway? (It’s so frustrating!). Aren’t chargebacks merely supposed to help a client get their money back? Well, not exactly. Chargebacks and regular refunds are not the same. Yes, the money is returned to the customer in case of a chargeback, but does that resolve the issue in a positive way? Not for you, alas, because you’re left dealing with some extra fees.

Furthermore, if your client leaves you without even bringing up the topic of a refund, chances are they leave in anger, to the point of spreading negative reviews whenever possible. Not exactly the best case scenario for you, isn’t it? With that being said, refunds can make your clients respect you if you approach the case well, while chargebacks are not as powerful in this sense. Still considering merchant chargeback protection to be a waste of time and money? Today, we’ll talk about how much your number of chargebacks can spike without putting your whole business at risk.

So, How Many Is the Norm?

At the end of the day, it all comes down to one undeniable fact: the fewer chargebacks, the better. If your chargeback ratio is approximately 1 to 100 payments, you’re fitting into the universal norm. Cross that 1% line and you won’t feel as good as you did before. Your partners and clients will start losing trust in you and your product, while you may even end up without the possibility to offer your clients the convenient credit card payment option. That just doesn’t sound good, does it?

Nobody likes these rules, that’s understandable. They’re quite possibly far from being fair. Should we even attempt to judge them? These things are as good as they get, similar to such unpleasant weather conditions as cold, wind, dust, etc. So, you just gotta get all comfy in your office chair, wait until the storm is over, and hope for the best, right?

Nope.

Preparation is Key

Prevent chargebacks from occurring on a regular basis by analyzing your customers’ behavior and acting upon it. Figure out what usually triggers your clients’ disputes. Upon understanding the reasons behind the chargebacks, you will be able to improve your product or services and i.e. avoid the nasty nuisance in the future.

Here are a few potential reasons why your customers may want their money back:

  • you didn’t manage to make your Terms of Service easily accessible;
  • your Terms of Service are challenging to understand and follow;
  • your customers don’t see your exact contact information on your website;
  • the product you’re offering doesn’t function as promised;
  • your customer service is neither fast nor effective, etc.

Always remember that the number of chargebacks you get affects the success of your business. Your proactiveness is very much needed when it comes to keeping that number down to the max. Ask your clients’ opinions about your product or services. That way, you will be able to refine your approach and boost your business.

BIZCATALYST 360°
BIZCATALYST 360°https://www.bizcatalyst360.com/about/
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