Credit chargebacks – as a business, they can sure ruin your financials in a hurry. Avoiding chargebacks for some companies means purchasing chargeback insurance, but is it really the right way forward for your organization?
What is Chargeback Insurance?
Chargeback insurance works like most other insurance policies. You pay a premium to a company who covers the costs should a customer involve you in a chargeback dispute. Unfortunately, the simple explanation here only covers some chargeback insurance policies. There are many others out there that don’t always cover you when you need it. In those scenarios, knowing the answer to the question “What does chargeback insurance” do is key because you could have been paying a premium for years when you end up with a pricey chargeback that isn’t covered.
Chargeback insurance typically does not cover friendly fraud, one of the leading causes of chargebacks. This happens when a customer claims the item delivered doesn’t match the description or purchases that weren’t delivered. It also doesn’t usually cover chargebacks that exceed their defined limits or even those that involve digital goods like webinars and downloads.
Is Chargeback Insurance Worth It?
Chargeback insurance can be a huge help in many situations for many companies. The reality is that it’s not enough to be the only tool in your toolbox, though. Because it has so many limitations, you may still face chargeback problems if you aren’t staying on top of things. Dealing with customer service concerns promptly and understanding what the warning signs of fraud might be are key to preventing chargebacks. Better contracts with customers and good record keeping are also both important. Even chargeback management software may help if you have a problem, as it helps you fight back when you have a case.
Chargebacks are a problem for all kinds of merchants today, but chargeback insurance may be one way to help you prevent any issues for your company.
Learn more about how Y2Payments handles chargebacks by contacting us today at 888-693-1850.
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