If you accept card orders, then you may encounter chargebacks.
A chargeback is when the cardholder's bank returns payment to the cardholder.
A transaction that is not authorized by a customer is referred to as fraudulent. A fraudulent transaction can result in a chargeback, which can cause you to lose money.
Here at Flipdish, we take many precautions to help you safeguard your acceptance of credit and debit cards online, with an extensive range of fraud checks and we see very low levels of suspicious transactions versus industry norms.
However, it is not possible to avoid all chargebacks. For example, some people place legitimate orders and then forget and later initiate a chargeback. Others use their ex-partner's card after a breakup. This type of fraud is impossible to detect.
Common reasons for chargebacks include:
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Fraud inquiries, where the cardholder denies participating in or authorizing a transaction
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Non-delivery, where the cardholder disputes the sale for reasons such as failure to receive goods or services
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Quality, where the cardholder disputes the sale for reasons of quality e.g. food was cold on delivery
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The customer does not recognize the transaction on the receipt or statement
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Disgruntled customers
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Deceitful and dishonest behavior
You can protect your business from chargebacks in several ways:
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Train your staff to reject suspicious orders
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Phone the customer to check the validity of the order
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Ask the customer to sign for the delivery
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Review high-value orders (especially those that are much larger than your average order size)
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Let your customers know the correct way to request a refund (which is to contact you directly)
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Be vigilant about suspicious behaviors e.g. person requests you to call them on a different phone number than the one they placed the order with
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Have CCTV footage
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Ask staff to be vigilant for suspicious behaviors and orders
To keep fraud low it's important for your staff to know that they can refuse suspicious orders. In these cases, they can
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Outright refuse the order
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Refund the online payment and require the customer to pay using chip and pin or cash
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Request that the customer show them the card used to pay online
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Require a photograph of the customer before handing over the order
We find that fraud is generally caused by a small number of people and once they are no longer served then it makes a big difference.... and your store staff is well placed to detect and prevent fraud. These customers cost you money, so it's important your staff help with catching the culprits.
Any disputed payments will be refunded to the cardholder and deducted from the store's balance, with Flipdish refunding any fees charged on that order to the store.
If you have any further questions, please don't hesitate to email us at help@flipdish.com
To learn more about Flipdish’s products or how to grow your online business enroll for FREE in the Flipdish Academy here: http://academy.flipdish.com/
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