The Importance of Customer Communications in Preventing Chargebacks

Stuart Joce Posted on July 23, 2020

It will always be preferable to not have a dispute at all, and the best resolution will always be prevention. To give your business the best chance of minimising disputes in the first place, consider these approaches.

  • Be proactive towards fraud trends.
    • Use internal and external insight and respond accordingly. By utilising 3rd party fraud mitigation tools you will be able to leverage industry trends to develop your risk mitigation processes. By collating outcome data on purchases you will be able to analyse your own specific insight about which types of customers behave fraudulently and adjust policy accordingly.
  • Reply promptly
    • Prompt responses to queries keep the customer engaged, helps them feel valued and creates a communication channel for you that is best suited to creating a resolution. There is a halo impact to responding quickly, in that you establish a reputation with customers for being available and responsive, which is not only conducive to helping them resolve issues but reflects values of a company that consumers will want to do further business with. A merchant that responds quickly when it favours the consumer, such as in the event of a dispute, will be perceived to respond quickly at all times.
  • Offer the most commercially viable and accessible communication channels
    • According to Javelin Strategy & Research 2018, 84% of contacts received by the merchant regarding a potential dispute were resolved without a chargeback. It, therefore, makes sense to offer all communication channels that customers use. However, some may not be commercially viable for you such as a domestically “manned” 24/7 call centre so it is important to understand which channels can work for you commercially and run them well. If customers need 24/7 contact but your model can’t afford a contact centre, consider web chat or an offshore centre.
  • Have clear terms, conditions and charges
    • Providing clear and accessible information will enable customers to self serve. This will reduce your costs, as well as enabling them to make a more informed purchase decision in the first place.
  • Know and live by card network best practices
    • The card networks are motivated to ensure a positive experience and maximise long term customer spend, just like you. They invest heavily and capture considerable data which they leverage to produce valuable insight in the form of best practice guidelines. It makes sense to use it.

When the inevitable happens;

  • Rules engine
    • Establishing clear processes and thresholds for deciding responses to disputes can enhance speed and service dramatically. For example, if a dispute meets certain criteria, refund immediately, for a different set of criteria, provide alternative responses.
    • By having a rules engine it is possible to optimise responses by reviewing which incidents result in chargebacks or customers returning later. This, in turn, allows you to optimise the investment in the dispute handling process.
  • Fast customer service
    • Provide customers with a fast response when there are issues. By responding promptly, the customer will be engaged with you rather than the bank, to raise disputes or with friends, to share their poor experience. By responding quickly and communicating until the matter is resolved, you are assured that subsequent conversations the customer has about your business are after a resolution, and therefore after a positive experience.
  • Clear policies
    • Take a look at your site with fresh eyes to ensure information is easy to find and includes Privacy Policy, Terms and Conditions, Refund and Exchange Policy. If a customer is looking for policies it is because they need them and they will continue looking until they find them. Have them to hand, ease their experience and create a reputation as an open and communicative business. By making policies available and accessible you will reduce contacts relating to policy-related questions which will save costs.
  • Easy returns and refunds
    • Returned products and refunds cost you the acquisition cost of the customer. If the refund is a positive experience, the individual may become a customer at a later date, in which case, the acquisition spend is not lost. If the customer doesn’t return the product because they can’t easily find the process, there is a risk of fraud which will result in the loss of product as well as the acquisition spend. And of course, the cost of negative word of mouth.
  • Easy to find contact information.
    • When the customer has a dispute, it is more important than at any other stage, to be contactable. As discussed earlier, consider all communication options that customers wish to use, and establish which of those work for your model.

Customers and businesses alike would prefer that things don’t go wrong. However, when they do an opportunity is created for dialogue with the customer, and this is an opportunity to create a positive experience and potential advocacy.

To find out more about how we can help make communication with your customer easier and more available than ever, at exactly the point needed to minimise chargebacks, contact us at https://www.paymenthelp.org/register-interest/