Tips To Minimize Chargebacks During Times Of Crisis

Base Insights

During times of national emergencies and natural disasters, it is not uncommon to see a sudden uptick in chargebacks, far exceeding “normal” for your business. Naturally, people start to consider ways to cut costs and eliminate services that are not necessities, which can wreak havoc on your business.

Should this national crisis have a direct and negative impact on your business, here are a few ways for you to mitigate your risks of excessive chargebacks and cancellations:

Talk to your customers

Educate your customers about alternative ways to receive services, notify them of delays in fulfillment, or offer a refund or discounted products in the future as an alternative. If you have the opportunity to create a waitlist, do so, and withhold full payment until the product is shipped or the service is rendered. Communication is key in all aspects of business, and now more than ever, being open and honest with your customers about your ability to provide the business that they are accustomed to during these times is imperative.

Have an open refund policy

You don’t necessarily have to support refunds as a first option but supporting refunds during times like these will go a long way and will save you money in the end.

Pause your recurring billing schedule

This is especially important for memberships that have been put on hold due to people staying at home. Unless you offer a virtual equal to your service, and your customer has directly agreed to that, you should just pause your recurring billing schedules until your customers can resume as originally intended.

Offer support

Encourage your customers to come to you directly with questions regarding billing, special situations, etc. The more available you make yourself, the less likely they are to initiate a chargeback.

Make sure that you are able to pull customer records for payment, receipts, and authorizations in the event they are requested for review.

Ensure your systems are secure

Ensure that your software and security within your business is up to date to avoid your account being compromised. Implement fraud filters for velocity, IP, CVV2, and AVS. Most gateways will have these basic features, and if you’re processing on our BaseX™ gateway, you don’t have to worry, but you should always remain vigilant. Fraud, especially mobile fraud, is incredibly high right now. Make sure you’re doing your part to mitigate your risk of a breach.

Monitor donations closely

If your business is reliant on donations, be proactive and review where and who they are coming from, and make sure to retain that information for your records. Refund excessive donations that are not familiar to your Non-Profit organization. Consider doing your own outreach to thank or make contact to ensure this is not a bad card or false information.

Merchants are still responsible for returns and corresponding fees, regardless of national emergencies or natural disasters. It is important to take precautions and be proactive in avoiding returns and chargebacks as much as possible by taking these steps and prioritizing open communication above everything else.

If you’re finding yourself overwhelmed and needing financial support to keep your business afloat during these special circumstances, there are options that you can turn to. There is a possibility that if you contact your current loan servicer or your landlord (if you have a physical location) that they may be willing to work with you via partial payments, interest-only payments, or deferred payments. Any help with reducing costs to your monthly overhead during times of crisis can be beneficial. It doesn’t hurt to ask.

There is also the path of grants or tax relief to those affected through the SBA. These funds are available to cover pay-fixed debts, payroll, accounts payable, employee sick leave, and more. To learn more about applying for grants and tax relief through SBA, click here.

Base is here to help you through these tough and uncertain times. We are always available to answer your questions and provide support for you to be successful in your business.

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