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3 Tips to Keep the Chargeback Grinch From Stealing Christmas

We’re barrelling into the busy Q4 holiday season and merchants have one big lump of coal on their minds: chargebacks. Chargeback are a costly problem—a problem that escalates during the high volume holiday shopping season.  According to Lexis Nexis, every $1 of fraud costs merchants an average of $3.29—an increase of 24% over 2017.

Thankfully, there are things merchants can do to prevent an onslaught of chargebacks. We’ve outlined three main tips to keep the chargeback grinch from stealing Christmas.

Optimize Security

Security should not be an afterthought when it comes to online payments. Employ the help of end-to-end fraud tools as well as branded security measures that can ensure your payments remain secure through every stage of a transaction. Consider the following:

  • Use customer verification tools like AVS and 3-D Secure.

  • Ask for the card security code at checkout.

  • Maintain awareness of regulatory and policy changes (like the PSD2 and EU Digital Single Market) and make updates to your processes where needed.

  • Employ 2-factor or multi-factor authentication like Mastercard Identity Check.

Minimize Confusion

Customer confusion is a top culprit when it comes to friendly fraud. Minimize areas of friction and add clarity to your website and communications processes to ensure that customers can easily get the information they need (or get in touch). Best practices include:

  • Clearly list your customer service phone number and email address. Also be sure your live chat can easily be found (if applicable).

  • Include delivery confirmation on all purchases, especially for high-value transactions.

  • Have a clear return policy and be sure to link to it on your websites and within emails. Also include on receipts.

Improve Customer Service

There are several best practices for merchants to follow when it comes to customer service. How merchants engage and interact with their customers (or don’t) has direct impacts on friendly fraud rates. A lot of fraud can be avoided by creating better lines of communication with customers and adding clarity. Chargebacks are easily prevented when a customer has a clear path to resolution for any and all of the issues that may arise after the transaction. These tips can go a long way in improving customer service:

  • Provide training for long-term and seasonal employees so everyone understands how to resolve customer service inquiries.

  • Respond to customer calls in 3 rings or less

  • Respond to customer emails within the hour

  • Make live chat available 24/7

  • Use order confirmation emails to “remind” customers of their purchase and all relevant details and also include customer support contact information within the email

  • Use real-time emails to communicate any issues or delays in shipping or in cases of backordered items

  • Use on-demand answering services to handle overflow customer service calls.

  • Provide detailed product descriptions and include product photos from multiple angles.

  • List your business name, URL, and phone number in your billing descriptor.

Following these best practices can keep chargebacks at bay so the holiday season is enjoyable for everyone. 

Chargeback Red Flags


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Jared Ronski

Jared Ronski



Member since

11 May 2018



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