Methods for Avoiding Chargebacks

The Best Management Strategies to Avoid Transaction Disputes

While it may be impossible to completely avoid transaction disputes, it is in a business’s best interest to try avoiding chargebacks whenever possible.

What Happens to Businesses Who Don’t Avoid Chargebacks?

Chargeback management consists of two steps: preventing chargebacks and disputing chargebacks.

Many merchants are only able to react to chargebacks once they’ve been filed. They operate in defense mode and are never able to get one step ahead.

While representment can help the merchant recoup lost profits, it does nothing to reduce chargeback ratios or fees. Once a chargeback has been filed, the damage is done. There is no way to remove the black mark a chargeback causes to the business’s reputation or bottom line.

To ensure the business’s longevity, merchants need a proactive approach that prevents chargebacks, reducing the need for representment.

You Can't Afford to Ignore Chargebacks.

Luckily, Chargebacks911 can handle it all for you, from risk mitigation to representment and more.


If merchants don’t invest the necessary resources to avoiding transaction disputes, several long-term ramifications could jeopardize the business’s sustainability:

  • Each chargeback comes with a non-refundable chargeback fee.
  • Representment drains valuable resources like time and money.
  • Those who use their efforts to rectify problems of the past through representment miss the opportunities to grow the business in the future.
  • Once the card networks' chargeback thresholds have been breached (or are in danger of being breached), the odds of the acquirer closing the merchant account are increased.
  • A terminated processing agreement means the business's sales volume will be restricted until the financial asset can be replaced.
  • Securing a new merchant account after termination will be expensive and maybe even impossible.

It is far better for merchants to avoid chargebacks in the first place. However, that task is easier said than done.

Some techniques for avoiding chargebacks can actually do more harm than good. Basically, there are two management strategies merchants can use to avoid chargebacks:

  1. Manage potential chargeback problems in-house
  2. Outsource to a chargeback professional

Option 1: DIY Chargeback Management In-House

Some businesses, especially small businesses, see DIY chargeback prevention tactics as a more realistic option than outsourcing. These merchants either don’t think there is sufficient ROI to outsource, have an unrealistic confidence in their own abilities, or don’t fully understand the ramifications of faulty management strategies.

A completely objective outlook on avoiding chargebacks with in-house techniques would identify the following benefits and drawbacks.

Benefits of DIY Chargeback Prevention Drawbacks of DIY Chargeback Prevention
  • A current employee can be appointed the task of chargeback prevention, saving the cost of hiring someone new.
  • While chargeback prevention is an ongoing task, it probably isn't a full-time responsibility. The in-house chargeback expert can be assigned other tasks.
  • A third-party entity won't have access to sensitive business information.
  • Chargeback rules and regulations differ by network and are constantly changing. Staying up-to-date can be difficult; without access to the latest information, strategies will have a lower success rate.
  • An outsider is able to carefully scrutinize business practices and policies, identifying potential chargeback triggers. An in-house specialist might not be objective enough to implement the necessary changes.
  • Businesses will likely spend an inordinate amount of time managing chargebacks and not enough time thinking of innovative ways to expand the business.

Merchants who are determined to manage chargebacks on their own are advised to do two things when attempting to avoid transaction disputes.

  1. Carefully review the chargeback regulations and policies implemented by each card network. These regulations are updated frequently, so it is advantageous to assign at least one person to monitor the situation carefully.
  2. Download our chargeback prevention ebook. The tactics outline in our ebook will help DIY chargeback analysts address the low-hanging fruit and avoid the easily preventable chargebacks.

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Examples of management strategies that will help merchants avoid chargebacks include:

  • Waiting until the merchandise is ready to ship to charge the card
  • Providing outstanding customer service
  • Using fraud detection tools like AVS, card security codes, and 3D Secure
  • Writing accurate and detailed product descriptions
  • Requesting customers read and agree to the terms of service before completing the checkout process
  • Sharing contact information
  • Using an easily recognizable billing descriptor

Option 2: Outsourcing to a Chargeback Professional

An option all merchants should consider is outsourcing the responsibility of chargeback management to a professional.

There are various tasks involved in preventing and disputing chargebacks; therefore, there are various outsourcing options available—a solution to address each task. Merchants can maintain some in-house responsibility and outsource a portion of the management to a professional. Or, there are turnkey services available that provide end-to-end accountability.

A completely objective outlook on avoiding chargebacks with professional help would identify the following benefits and drawbacks.

Benefits of Outsourcing Chargeback Prevention Drawbacks of Outsourcing Chargeback Prevention
  • An outsider can provide an unbiased, objective assessment of business practices, which often brings to light overlooked chargeback triggers.
  • Because fraud techniques are constantly evolving, new tactics can damage a business before the merchant is even aware of the threat. A professional is capable of detecting emerging risks and taking the necessary steps to prevent them from becoming liabilities.
  • Friendly fraud has made it extremely difficult for merchants to determine the true cause of chargebacks. Professionals use proprietary technologies to accurately define chargeback triggers and implement strategies to prevent them from happening again.
  • Professionals aren't distracted by the day-to-day operations of a business and are able to focus solely on avoiding chargebacks.
  • The payment industry has a very unique, and difficult to understand, nomenclature. A professional is able to understand jargon and ensure complex terms don't impede the effectiveness of a strategy.
  • Despite non-disclosure agreements, merchants might not want a third party to have access to their valuable lead list.
  • Not all chargeback management specialists are created equally. Businesses seeking to outsource must do their due diligence before committing to a provider. Some strategies can do more harm than good.
  • Because the ROI is significantly greater, there is a higher initial expense to outsourced assistance.

Naturally, these are only some of the pros and cons of professional assistance. All merchants could add a few more points to either column. The important thing is to carefully evaluate the ROI of any strategy. Lower costs usually provide fewer profits. More expenses can generate higher profitability.

It all comes down to this…

The most efficient DIY strategies are usually capable of addressing the “low hanging fruit.” These tactics can help a merchant avoid easily preventable chargebacks.

Professionals are capable of preventing these obvious chargebacks too. However, professionals are also capable of conducting a detailed diagnostic analysis to help the merchant avoid chargebacks in every possible situation. If a chargeback can be prevented, a professional will prevent it.

Getting Started

If you are looking for somewhere to begin, consider Chargebacks911. In addition to all the generic outsourcing benefits, we have a few other perks you’ll want to consider.

  • Chargebacks911® has the broadest alert system on the market. Alerts allow the merchant to refund an unauthorized transaction and avoid a chargeback.
  • We operate on a global level. We understand ecommerce transcends international boundaries and you need a service provider who can do the same.
  • Chargebacks911® offers the only ROI guarantee. We promise our chargeback management efforts will improve your bottom line. If our services aren't a good fit for your business, we'll let you know.

Contact us today for a free ROI analysis. We’ll show you how much more you could earn by outsourcing to a professional and avoiding chargebacks in situations you would have never thought possible!

Prevent Chargebacks.

Fight Fraud.

Recover Revenue.

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