Avoiding Chargebacks With Your Merchant Account

By Matthew Nelson

In order to understand how a credit card chargeback can be avoided, you must first understand how a credit card issuer, and a credit card processor work. The card issuing bank protects the cardholder and the processing bank protects the merchant. The two work hand in hand with the cardholder to insure that both parties come to an agreement over disputed goods and services.

Are you fulfilling your shipment dates and quality commitments according to the expectations you have promised your credit card customers? Are you promptly responding to Cardholder requested returns and refunds according to your policy, and submitting the appropriate credit transactions to your Processor? Are you doing everything you can to verify that the credit card numbers you are accepting for your goods and services are from the actual cardholders, and not from someone else that happens to know the card number? There are several things you can do to help protect yourself from being faced with chargeback fees. By following the few steps listed above, it may help you to better protect yourself.

Are you meeting the terms of your agreement with your Processor regarding charging the card and timing of delivery? You must be aware that the safest way of accepting credit cards is by having the card present. In online situations where verification isn't possible be careful that the card and address is matching along with the CVC in the back of the card.

Many payment processing companies try make themselves look large on the internet, yet are really just big advertisers and high pressure sales people who are not really a payment processing company at all. They will sell a merchant account for whoever pays them the most commission. It is always the merchant who ends up paying for it, usually in the first few months and in merchant account startup costs.

Be sure to find out if there are any fees that aren't openly disclosed. Here is a list of some of the fees that merchants end up paying for because they are unaware of a better solution:

Chargeback fees
Retrieval fees
Termination fees
Gateway fees
Gateway Per Item fees
Hidden setup charges
Non-refundable setup charges
Batch fees
Cancellation fees
Minimum fees
Pass through fees (these vary)
Over limit fees
Voice Authorization fees
AVS fees
Non-Sufficient Funds fees
Bank Setup fees
Daily Close-out fees
Software fees
Licensing Fees
Annual fees
Amex/Discover setup fees
Statement Fees (more for more services)
Customer Support fees
Technical Support fees

Most business owners generally try to find a merchant account provider that offers the lowest possible rates. In some instances, it may be more advantageous to go with a higher rate so you can get the majority of these fees included rather than paying each of them individually added to your monthly bill. The best advice that we can give you is to be sure you know exactly what you are getting before you sign the merchant account contract!
This article has been written by Matthew Nelson. Matthew is the Marketing Director of Capital Merchant Solutions. Capital Merchant Solutions is one of the leading merchant account providers in the nation.