Written by:
Amber Day
Director of Agency Services
Chargebacks, or credit card disputes, have become one of the riskiest parts of the CPA industry. It is one of the reasons that people are hesitant to get involved in this industry; and once involved, it can become one of those issues that will keep you up in the middle of the night. However, many people don’t realize that there are a number of ways to minimize the number of chargebacks received for an offer, and ways to successfully dispute the charges that are received.
One of the most essential ways in preventing chargebacks is communication to customers. In the Terms and Conditions, the chargeback policy should be clearly stated. The Chargeback policy will vary depending on the offer. An example of a statement in a chargeback policy is “Customers who pull chargebacks will be reported to all major credit bureaus as a delinquent collection account.” Creating a statement similar to this lets customer’s know that they will have a paid collection account on their credit for a minimum of seven years. Any customer who is concerned and careful about their credit will be sure not to chargeback to that offer.
The Terms & Conditions will also need to include very specific details on the return policy. The amount of time for a return needs to be clearly specified, details on how to return the product, and any other fees that may be encountered with processing a return; i.e. restocking or processing fees, shipping fees, etc. Including a specific return policy that is clear and is not confusing to anyone will encourage customers to return the product in the proper form, instead of getting frustrated and going directly to the bank to chargeback.
In addition to proper communication to customers, pricing has proven to make a small difference in the number of chargebacks that an offer receives. In a continuity model, the dollar amount doesn’t make as much of a difference as the cents in the pricing does; and the price of the initial purchase makes no difference at it. The monthly fees are the ones that become an issue. All pricing should end in the numbers – 2, -4, and -7. The cents in the pricing should be a combination of those number. For example, a price that is $96.47 will cause less chargebacks than a price that is $96.97.
There are many other ways to prevent the number of chargebacks an offer receives:
- High-Quality Customer Service
- Value Added Programs
- Excellent Fraud Prevention Services
- Class A Traffic
Even through implementing all of the above techniques, chargebacks will still occur on an offer. Once a chargeback is received, it is essential that every offer has a chargeback fighting service in place. All Chargebacks should be fought before their “respond to” date to increase chances of winning the chargeback.