Regardless of how you feel about chargebacks, it’s hard to deny that they’re a severe problem for merchants and banks. From fraud to ancillary expenses, they’re a drain on businesses. And they’re increasing in popularity. That means we need to find a way how to stop chargebacks.
Payment Fraud is On the Rise
Almost three-quarters of businesses reported falling victim to check fraud in 2017. Meanwhile, digital wallet payment scams are prevalent across all high-growth markets. And as consumers continue to rely more on digital payments, merchants must be prepared for an evolving payment landscape.
A new study from LexisNexis Risk Solutions reveals that payment fraud is rising. In addition to identity fraud, credit card fraud and external fraud have increased. However, the true challenge is the breadth of fraud. Fraudsters rely on the weakest link in the fraud chain.
The study, commissioned by LexisNexis Risk Solutions, surveyed 326 decision-makers in Europe and Latin America. It found that fraud attempts increased by 41% year-over-year in 2021. The study also found that fraud attempts are most prevalent when a mobile app is used.
The report notes that money mule accounts are often discovered through anti-money laundering efforts. However, banks must develop processes to identify money mules and close them down.
They Can Lead to Account Suspension or Outright Closure
Managing your chargebacks is a multifaceted undertaking. Not only does it require a substantial commitment of time and energy, but it can also be a costly exercise in monetary terms. This is especially true for smaller merchants in more remote areas. Moreover, if you do not have a robust chargeback management system, you could end up on an industry blacklist and out of business. Fortunately, there are some proven ways to minimize the impact of chargebacks on your business.
The best way to do this is to find a reputable chargeback management firm to partner with. A quality chargeback solution can help you navigate the minefield of chargebacks and mitigate the risks of losing your hard-earned cash. In addition, a quality chargeback system can help you reap the rewards of increased sales and improved customer relations. A good chargeback solution can also ensure your customers are happy and safe from fraudsters. If you have a small business, check with your bank about the fees before signing on with a new merchant account provider.
They Serve Their Intended Purpose
Whether you own a small business or not, it is essential that you understand the chargeback process and how it can affect your business. Chargebacks are a process that reverses credit card payments and protect consumers from fraudulent merchants like merchant chargeback protection. The process gives consumers the right to report scams and unfair merchant practices. It also limits consumer liability in cases of fraud. While chargebacks can be frustrating, they can also serve an essential purpose and an excellent way to protect consumers from dishonest merchants.
Whether you own a small business or work at a large corporation, chargebacks can be an operational and financial problem. Therefore, you need to know how to prevent them from occurring. Chargebacks occur for various reasons, but the most common cause is a customer dispute. The dispute can be based on not being satisfied with a product or service or being unable to get a refund.