Chargeback Management Software: The Right Tool for Avoiding Chargebacks?

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Chargebacks: they’re a serious problem no merchant wants to face today. They not only interrupt your revenue stream, but they also take up your time and energy. While you can fight them, the burden of proof is always going to be on you, and that may lead you to consider a few ways of avoiding these problematic transactions. Some look to  chargeback management software as the ideal option, but is it really the best tool when you’re building a plan for preventing chargebacks?

What Is It?

To understand why chargeback management software is such an important tool for so many businesses, first, it’s important to understand why chargebacks are such a problem. Google the phrase “what are chargebacks,” and you’ll get a quick overview of the issue. Chargebacks occur when a customer disputes the transaction. Often that means retailers either end up with a delayed payment or no payment at all for the goods or services involved.

Chargeback management software, then, is a way to help prevent the problem initially. While every company offers something a little different, typically this type of software involves real-time notifications and alerts as well as automated chargeback responses and representation in cases. Typically it also comes with data management and a better overview of what’s happening with chargebacks in your business.

Is It the Right Way Forward?

Chargeback management software is one of many tools you’ll want to keep in your toolbox to help you stay on top of your business’ needs. Start by looking carefully at the chargebacks that you face on a regular basis. Do others in your industry face the same issue or is this unique to your company? Use the reason codes attached to the chargebacks to help you better understand what’s happening in your business and why you’re experiencing these claims.

Don’t forget to do some research here. Chargeback rules are changing all of the time, as are the regulations that govern them. Read as much as you can so you have a better understanding of these changes and how they might affect your company.

What To Look for In Chargeback Management Software

If you think chargeback management software might be right for you, there are a few things you’ll want to consider. First, make sure the software includes the information you need to track and analyze chargeback activity for your business. Without that data, you may never solve a persistent problem. Second, look for automated chargeback response. It will save you quite a bit of time in the long run, and it may help increase the overall number of cases you win.

Additionally, ensure the software you select is updated on an ongoing basis. Remember that chargeback rules and legislation change continuously, and that means that the software you use to manage them needs to change just as frequently.

Finally, look at every company’s win rate. Most chargeback software programs will show you their win rate average to help you decide whether it’s a purchase you want to make. Some will go as far as offering you a win rate guarantee, though not all are willing to do so. A win rate average, though, will at least show you how many other merchants are succeeding thanks to that software.

Chargeback management software is one great way to keep your chargebacks in check and keep your business moving forward. Y2 Payments has a robust, real-time system that helps you look closer at what’s happening and assists with chargeback management, something that could save you time and money. To explore what Y2 Payments has to offer, please contact us today.

Do These Three Things Before You Buy IT Chargeback Software

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In a recent ClearSale survey, 81% of customers surveyed said they would fill out a chargeback request out of sheer convenience. The idea that customers would initiate a chargeback rather than taking the steps necessary to contact the merchant is terrifying for most merchants because chargebacks are incredibly expensive. 

Not only do you lose the merchandise and the money, but you also face chargeback fines. More than that, though, you lose valuable time trying to deal with the chargeback. That’s time you could have spent on improving your product line, customer service, or your store as a whole. All of that makes software for chargebacks – a valuable IT solution to the problem – is in great demand today.

What is Chargeback Software?

Chargeback software is an IT option that helps you reduce the number of chargebacks you see and win the disputes that have already been filed against you. Different providers offer different options. Some focus on an alert network that allows you to see the moment a chargeback has been filed against you. Others, though, offer turnkey services allowing you not only to see when a charge has been filed, but also follow-up steps to help you win your case. 

The Best Chargeback Software  

Does this sound like the solution your business needs now? There are many that claim to be the best IT chargeback software on the market today, but few live up to that claim. As you try to evaluate what’s out there, be sure you consider the following aspects. 

  • Look for an IT solution that actually addresses your problem. Do you want something that just intercepts chargebacks or are you looking for a way to fight them? Make sure you know what you want out of a piece of software before you buy.
  • Look for one with robust data. You’re never going to get on top of your chargeback problem if you don’t get some data. Make sure your software solution identifies the source of the chargebacks so you know more about how to adjust your company policies. 
  • Look for one that saves you money. If it’s too expensive, you’re not really doing anything for your company, so make certain you understand whether a monthly service fee is involved or whether it will cost you on a case by case basis and whether that makes financial sense for your company. 

Chargebacks happen, but they don’t have to be so pervasive with solutions like chargeback software available today.  For information on how Y2Payments system works, give us a call today at 888-693-1850.

Chargeback Protection for Merchants

chargeback-protection merchants y2payments

Accepting credit cards has become synonymous with finding ways of avoiding chargebacks for many merchants today. What are chargebacks? If you’re unfamiliar with the concept, chargebacks occur when customers contact their credit card company to dispute a charge on their cards. If the dispute is deemed to hold some merit, your merchant account is actually debited the amount of money in question (even if it has already cleared), and you have to pay chargeback fees, which can be as much as $100 in some cases. 

For many small businesses, finding merchant protection against chargebacks is nothing short of an absolute must. What can you do to end the problem for your company? These tips can help. 

Preventing Chargebacks

There are a number of things you can do to prevent customers from filing a chargeback with the credit card company.

  1. Understand why Chargebacks are Occurring: The single best move you can make is to take a look at the data you’ve already gathered on chargebacks. If a common theme emerges, you can address that problem immediately. If the chargeback reason codes are all over the place, you may have to address issues in several areas. 
  2. Create Stronger Policies: If customers don’t understand your purchase policy, your restock policy, your return policy, or even your subscription policy, they’re going to get frustrated. What often happens when customers get frustrated is that they don’t know where to turn, and one of the easiest, fastest ways for them to deal with the problem is to contact their credit card company and get their money back. You can avoid all of this if your policies as far as shipping, billing, and returns are carefully worded on your site and easy to find. Many sites even put a little info section next to their product or service description so customers understand what they’re purchasing. 
  3. Build Better Customer Service: What happens when a customer contacts you? Your team and policies with regard to customer service may need to be revamped as well. Make it easy for customers to reach out to you. Offer a phone number, 24-hour chat service, an email address that you check regularly, or even social media links to help better connect with customers. Not only will this step help to prevent chargeback problems, but it may also increase your brand’s credibility, and that could lead to repeat customers. Just remember that rapid replies are essential. They’re already frustrated when they reach out to you. Be ready to help as soon as possible. 
  4. Consider Shipping Updates: If you sell physical products, be sure customers know when their items have shipped and how soon they should arrive at their doorsteps. There are many automated services you can deploy to do this for you, and the more insight you can offer customers, the more likely you are to avoid shipping related chargebacks. 
  5. Beef Up Anti-Fraud Tools: Fraud happens, and it can actually create more chargebacks than you’d imagine. While criminal fraud represents the minority of those chargebacks, friendly fraud happens quite often. Sometimes it’s buyer’s remorse. In other cases, they just don’t know how damaging it is to the merchant at the other end. Either way, use the anti-fraud tools you have at your disposal. Address verification, customer blacklists, and more can all help you prevent problems. There are lots of antifraud platforms, too, that can help you build a more robust strategy. 

A Note About Subscriptions

If you’re one of the many merchants who offer subscription-based services, you need to recognize that you’re at real risk for chargebacks. It should be an opt-in option if possible. Ensure you make it incredibly easy to cancel those subscriptions, too. Additionally, you need to ensure the description that goes to a customer’s credit card statement helps identify what’s going on. If you have another name that you’re doing business as, it should be part of what actually gets charged to a customer’s card. Furthermore, customers should know what that charge will look like on their cards. 

The Moral of the Story

Chargebacks happen, but they don’t have to happen to you. At Y2 Payments, we have a number of solutions aimed at preventing chargebacks. Contact us today to learn more about how we can help

Preventing Chargebacks on Recurring Payments

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Too many chargebacks mean serious losses for your business. It could also mean you have trouble finding a credit card processor who will work with you in the future. Chargebacks are more likely to occur with recurring charges to a customer’s card than they are anywhere else, but is there anything you can do to prevent them?

What Are Chargebacks?

If you’re not already familiar with the term, chargebacks occur when the customer disputes the transaction. The merchant has the charges debited from its bank account, and the customer gets his or her money back. The goal of the card industry is to protect consumers and the merchant bears the risk.  Unfortunately, though, sometimes customers just aren’t happy and choose to initiate a chargeback. In settings like that, it is possible to reduce your numbers. 

Preventing Chargebacks

If you have a recurring service that customers can sign up for, there are several ways of avoiding chargebacks.  First, make sure you clearly inform customers about free trials. Help them understand how long that trial lasts and what happens at the end of it. As it gets closer, make sure they know how much time is remaining and how long they have to renew. Ensure they know exactly how much they will be charged, too. 

Beyond that, you can clearly state your refund and return policy. Highlight your policies on your sign up page. You may even want to have them check a box so you know they understand when they can get a refund or make a return. You may also want to make canceling a subscription a fairly easy process. After all, if a customer knows he or she can easily cancel, you’re more likely to empower them and help them understand that they have control. That means less risk, which usually translates to more loyal customers. 

Finally, make certain the bill is posted on a regular bill. Keeping the same billing date and the same format creates a level of transparency that is a must with recurring charges. Chargebacks happen, especially with recurring services, but they don’t have to happen to you. Contact Y2Payments today at 888-693-1850 to learn about our payment processing and chargeback protection system.

The Importance of Fraud Protection

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A 2016 Nilson Report estimated that fraud losses related to credit cards topped $24.71 billion in that year alone. Those numbers have only increased since that study was done, and businesses like yours simply can’t afford the cost of fraud today. In fact, one survey found a small business will spend nearly $40,000 just to recover from a security breach. As fraud becomes more and more relevant to companies in nearly every vertical, learning how to protect your company from fraud is essential. These tips can help.

Move to Chip Cards

EMV chip cards can help you with credit card fraud protection. The United States has one of the highest fraud rates of any other country today, and a big part of that has been its slowness to move to the EMV chip system, something many businesses are just starting to do. The UK saw nearly a 70% decline in fraud when they moved to the same system. You’ll need to talk to your processor to get the required equipment, but it could help you create a consistent cardholder experience and avoid liability.

Watch for Potential Problems

If you’re handling a card present transaction, keep an eye out for potential signs of fraud, and train your employees to do the same thing. Simple things like a customer purchasing a large number of pricey items or trying to rush you through a sale when it’s closing time are indicators you may be processing a fraudulent sale.  Having a customer who tells you their card is damaged may also indicate a fraudulent sale.

Follow the Right Procedure for CNP Transactions

If you process a lot of online sales or you take orders over the phone, you’re processing CNP, or Card Not Present, sales on a regular basis. Take a few extra precautions with these kinds of sales. Watch for orders that include several items of the same type or nature. You should also take extra care with orders that are made up of bigger ticket items. Rush orders, too, can be a problem, as are those that fail the Address Verification Service you’re using. International orders may pose a problem, as may orders that have made multiple attempts to pass through your system.

Keep Friendly Fraud in Mind

Friendly fraud is just as dangerous as any other type when it comes to your business’ costs. This happens when a customer asks their bank to issue a chargeback, even if the refund is unwarranted. Chargeback fees can be incredibly damaging to a company, but it’s really easy for a customer to initiate. Often, credit card websites display a “Dispute” button next to every single transaction, and you not only have to give the customer his or her money back, but you also have to pay a chargeback fee of as much as $50 per transaction. It’s tough to reverse chargeback fees once they’ve gone through, too. Good communication with your customers from the start can help, as can setting clear expectations about the sale from the outset. Even taking an added step like confirming that shipments successfully reached your customer is a helpful step.

Report Fraud

The final step in protecting your business from the costs of fraud is to report it the moment it happens. If you suspect that you’ve processed a fraudulent transaction, be sure to call the credit card’s authorization center at that moment. Tell them you have a “Code 10 authorization request.” If the customer is still with you, be sure you remain calm and avoid alarming him or her. Hang onto the card if it’s possible. The operator will ask you a series of questions, and if necessary, you may be asked to contact the police. It’s also important you contact your bank and your credit card processor at some point after you’ve discovered fraud occurred.

Credit card fraud is a growing problem, and the single best way to prevent it within your company is to continue learning how it might occur and what you can do to save your company from the hassle of dealing with it. Because fraudsters are continually changing their tactics, you may want to consider reading fraud prevention blogs and even attending webinars that could help on a regular basis.

For information on how Y2Payments system works, give us a call today at 888-693-1850.

Merchants and Payment Fraud: The Guide You Need

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It’s a sad reality that payment fraud is something all business owners have to think about. While we wish it would simply disappear, it’s not going to go away any time soon. The big problem with payment fraud, aside from it being a serious hassle, is the fact that there isn’t just one kind of fraud that business owners have to worry about. There are many different types, including account fraud, credit card chargebacks fraud, friendly fraud, and the list goes on and on.

It’s important for business owners to understand that they need to have strategies set up in order to help detect, prevent and manage any sort of fraud situations that may occur because when it comes to merchants and fraud? It’s not a possibility that you’ll eventually have to deal with it, it’s an absolute certainty. That’s why having a company to help you with handling fraud is so important.

It’s important to note that when a customer is compromised, they not only are going to be much less likely to come back to your establishment, they’re likely going to put reviews up giving you some negative press and potentially harming your business greatly.

Learning about credit card chargebacks is especially important because it can definitely be a huge hassle for a business owner. This is because the chargeback is actually initiated by the credit card holder which could result in a return of funds to them, even if they continue to keep the product they purchased from you or continue to use the service you sold to them.

Getting the right fraud protection for merchants is definitely important, and learning about fraud insurance is something that any business owner should consider as well. Merchants and fraud do go hand-in-hand, but with the right company, like Y2Payments, behind your business you’ll find that you don’t have to worry about the fraud as much as you would if you were handling things on your own.

For example, Y2 oftentimes deploys a technology called 3D Secure (3DS). It is a Visa/MasterCard fraud prevention tool designed to eliminate such cardholder claims. When 3DS validates a card transaction if also completely eliminate the chargeback fees for the merchant. Having a shield up between you and those who would defraud you is definitely something that can help your business.

How to Reverse Chargebacks

y2payments reverse chargebacks

Handling chargebacks is a process fraught with frustration. You have to convince the bank that a chargeback dispute isn’t legitimate. It’s difficult – the system is built to favor customers for some good reasons. However, when credit card chargebacks should be reversed, it’s difficult to get it done easily. There is chargeback protection for merchants, like chargeback insurance. Let’s start from the beginning about what you can do.

Challenge the Chargeback

The most important step is to dispute credit card chargebacks when there’s a good reason to do so. If you absolutely know the customer’s in the right, and wasn’t provided a product or service, then don’t waste your and their time. However, if you’re in the right, then challenge that dispute. Most merchants either challenge fewer than half their chargebacks or never contest chargebacks. You should challenge every chargeback that you feel shouldn’t have been made. There’s evidence that this helps reduce the overall number of chargebacks you’ll face down the road.

Chargeback Insurance

Chargeback protection for merchants is available in the form of chargeback insurance. It was mentioned above that many chargebacks are made legitimately. These could be the result of stolen credit cards or credit card information, for instance. In this case, a merchant with chargeback insurance has protection. Such insurance policies may only cover transactions made through a particular payment processor, so be aware how and when you’re covered.

Chargeback Time Limit

Remember too that there is a chargeback time limit. Cardholders in general only have 120 days to file a chargeback related to fraud. There are time limits set up for every step of the dispute and challenge processes as well. Make sure you’re aware of all the time limits at play – they’ll vary by card and other factors – so that you’re able to assess the dispute’s legitimacy as well as your own timing and ability in responding.

For more information on Y2Payments Chargeback protection and how it works, contact us today at 888-693-1850.

The Difference Between Chargebacks and Refunds

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Various types of high risk merchants need to be aware of the difference between chargebacks and refunds. The best high risk processors will offer high risk merchant accounts that acknowledge these kinds of risks but still treat them fairly. First, let’s start from refunds. Chances are you already have a good idea of how refunds work, since most of us have had to ask for one from a business at some point in our lives:

Refund – A refund occurs when a customer asks for funds to be returned to the customer’s credit card and the merchant agrees. This usually occurs when the customer returns goods, or the merchant fails to provide goods or services for which the customer has paid.

Partial refunds typically occur when a customer has been provided goods or services, but is unhappy with them, or a particular element was never provided.

Chargeback – A chargeback happens as a result of a dispute. Typically, the cardholder disputes a charge on their credit card statement with the bank that issues the card. This can happen as a result of:

  1. Fraud: The card was used without the customer’s authorization.
  2. Failed Refund: The customer attempted a refund through the merchant, but the merchant either failed to respond or refused to provide the refund.
  3. Inaccuracy: The goods or services that were provided were misrepresented to the customer.

What are High Risk Merchants?

Many types of high risk merchants must pay particular attention to these elements because they can reduce the number of processors willing to give you a good deal on your payment processing.

Businesses that see a high number of refunds and especially a high number of chargebacks can very quickly be labeled high risk by payment processors. This is because chargebacks serve as a red flag that a business is either failing to provide refunds or is misrepresenting their goods or services.

There are many high risk merchant accounts, but they’ll often charge you much higher rates and fees than you should be charged. The best high risk processors will reduce these rates as much as possible, and will specialize in these types of accounts.

With more than thirty years of payment processing experience, Y2Payments can help you save some of that money from your current statements and have it go directly to your bottom line! Contact us today to learn more.

How to Manage Chargebacks Better

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It’s happened again. You get yet another alert that a credit card chargeback has occurred. Now your funds are tied up until the dispute process is complete. You might win the process, you might lose the process. Either way, though, you’re dealing with a frustrating situation that you shouldn’t have to fight. It impacts your business, and it could hurt your customer base. How can you manage chargebacks better and get your business back on the road? Take a look.

Understanding the Process
What are chargebacks, exactly? A chargeback occurs when a customer is unhappy with the charges on his or her card, and contact the card company. The funds are debited from your account, then held in escrow while the investigation takes place. You’ll be asked to take a closer look at the order in dispute, then provide any evidence that the chargeback is not valid.

Customers typically file a chargeback if they didn’t receive the product or service, the product or services weren’t as described, or they claim the transaction was fraudulent for one reason or another or the cardholder may simply want to avoid accepting his or her financial responsibility and blatantly defraud the business. As the merchant, you have to decide whether to fight the chargeback or give the customer his/her money back.

End the Chargebacks
Obviously no business wants to deal with or manage chargebacks, but there are a few things you can do to help eliminate disputes.

First, start by creating a process your employees can follow easily that helps to reduce any potential errors on your end. For example, something like processing a transaction more that once or entering the wrong amount can cause a chargeback.

Educate your employees so they know how to use the system well. You’ll also want to know and understand the signs of credit card fraud. While this can be a bit tougher if you work with a digital system or phone-based sales, but developing a program to help educate your employees to spot and deal with fraud can help immensely.

Finally, keep your focus on your products and services. Answer customer questions promptly. Make sure your advertising matches your products, and follow your industry regulations carefully.

Chargebacks are never a fun process, but we can help to simplify things a bit. To learn more about how Y2Payments handles chargebacks, contact us today.