8 Real-Life Ways to Reduce Refunds And Chargebacks

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by: Richard Adams, MerchantAccountForum.com

Chargebacks are potentially disastrous to your business. You’ll get charged a large fee for every chargeback, and if you get too many, your processing account will likely be closed altogether.

Either way, the result isn’t great and so the intelligent business owner constantly looks for ways to reduce refunds and chargebacks.

Here then are eight very real ways in which you can reduce chargebacks in your own business.

1) Offer Post-Sale Bonuses

Rather than providing everything straight after purchase, some smart marketers have recently been setting up a whole host of additional free bonuses, which their customers get one at a time over a period of several weeks.

This is an ideal technique as it means that your customers have a very good reason not to ask for a refund – after all they’ve got plenty more to gain over the coming weeks haven’t they?

This is easy to set up in terms of an autoresponder to which customers are automatically subscribed to, which sends out messages at regular intervals providing a link to the next bonus.

2) Be Open If You Use A Third Party Account

If you use a third party processing account such as Clickbank, 2CheckOut or CCNow then make it crystal clear that you do.

After all, one of the drawbacks of using a third party account is that your company name never appears on the customer’s credit card statement. So let them know that they’ll see a charge for $x from your processor.

That way it won’t be a surprise when their bill turns up, which leads to them initiating a chargeback because they’ve never heard of the company that’s charged them.

3) Be Available

Whenever anyone buys anything from you, provide your email address incase of any problems.

Better that a customer emails requesting a refund than initiates a chargeback because they can’t work out how to get hold of you.

4) Over Deliver On Your Promises

If your sales letter extols all sorts of lofty promises that simply aren’t matched by your product not only will you receive lots of refund requests, but you’re also actually breaking the law and could be taken to court for it.

So whilst I appreciate that your sales letter needs to create a feeling of “want” in your customers, you also need to be fair and honest.

In fact, providing additional, unannounced bonuses is a great way to over deliver. It’s happened to me a few times, and I still go “Wow!” when I actually end up getting more than I was expecting. And a customer that feels like this very rarely asks for a refund.

5) Offer A Lifetime Bonus

Imagine if there is some part of your product that customers will use for months or even years to come. One perfect example would be an online tool inside a membership site or a members-only discussion forum.

By requesting a refund they know they won’t *just* lose your ebook, they’ll also lose access to your special discussion forum, or online software, or article database etc. That way it’s a lot more painful to request a refund.

6) Keep Records

Keep records of customers and when they bought, the card they used etc. Then, if you *do* get any chargebacks at least you have some evidence.

7) Use Advanced Authorisation Processes

Some card processors just ask for a name, credit card number and expiry date.

However, some will ask for additional information such as the security numbers off the back of the signature strip, your address, the name printed on the card etc.

All this additional information, which is checked against the registered user of the card, will reduce fraudulent sales and so lessen your chances of chargebacks.

8) Be Likeable

It sounds simple, but if you’re likeable and helpful you’ll save yourself a lot of hassle. I bought a product not so long ago and it didn’t live up to the sales letter.

I emailed to request a refund and got a blunt reply telling me that there was nothing wrong with their sales letter or product and therefore there was no legitimate reason for me to have a refund.

Well, as there was, and I didn’t like being treated like a criminal, I just initiated a chargeback. I wonder if that company ever wondered why?

Be nice, be approachable. Be willing to help out if your customers have questions after purchase. And be willing to happily give a refund to any customer not 100% satisfied. Because it’s lots less trouble than dealing with chargebacks.

Richard Adams is the founder of Merchant Account Forum, one of the net’s most popular merchant account advice sites. Click Here Now =>