Chargebacks are a huge problem in the ecommerce market and can be problematic and costly for even the most experienced online merchant. Using an online payment gateway that has experience in dealing with charge backs will greatly decrease the amount of time and money merchants waste on this controllable situation.

As each chargeback case is different from the next, merchants need to work with a payment gateway that can advise the merchants on how to manage charge back levels. This allows the merchant to reduce the fees lost due to charge backs and keep their merchant accounts under the allowable chargeback limit. Even though the situation can be easily avoided it is still a common scenario to see a merchant lose their ability to accept online credit card payments because they exceeded their chargeback limit.

CEO of Cashtronics Online Payment Gateway explains "Chargebacks can be a real problem for merchants and can be very expensive. Exceeding the monthly permitted percentage of charge backs can lead to merchants being cut off by both Visa and MasterCard. At Cashtronics we work hand in hand with our clients to ensure we do everything we can to avoid potential chargebacks."

Below are 10 guidelines we recommend to our clients to reduce chargebacks:

1. Refund Policy: The refund policy should be clear, concise and easy to find. When it is necessary to refund a client merchants should do so in a timely manner and let the customers know how long the refund process will take. Use a payment provider that has the option of processing manual refunds from the back office so that refunds can be made quickly by the merchant themselves.

2. Professionalism: Merchants should be clear with their offers and not attempt to "scam customers" in order to make a quick profit. By providing accurate descriptions and images of products and by not mis-leading customers into buying or signing up for something that they did not want a merchant can greatly reduce chargebacks.

3. Contact information: Customer service contact information should be easy to find, free and should be offered in various forms, such as telephone, email, a contact form and live chat.

4. Order Status: Supply customers with a way in which they can check the status of their order as well as giving them an approximate time frame for when their product will arrive. If there is a delay or a product is out of stock merchants should inform the client as soon as possible.

5. Credit card statement: Merchants should choose a descriptor to appear on the client’s credit card statement that the customer will recognize, this will avoid confusion when the customer checks their statement. An unrecognized descriptor is one of the most common causes of a chargeback so merchants should verify with their payment gateway that they have the option to choose their own descriptor. In the case that the customer does not recognize the descriptor a merchant should include their phone number in the descriptor so that they can call first to identify the charge rather than going straight to their bank and claiming a chargeback.

6. Customer satisfaction: Many chargebacks are a result of a customer being unsatisfied with the quality of the product or service purchased. If this is the case merchants must be willing to discuss the problem and aim to rectify it with the customer.

7. High risk orders: Merchants should be suspicious of foreign orders from certain high risk areas such as Asia, Africa and the Middle East, as well as with large value ticket sales requested to be sent with fast delivery. Merchants should also be wary of orders that provide domestic billing addresses with foreign shipping addresses as they are very often fraudulent. Any suspicious order should be followed up with a verification phone call or email and then cancelled if necessary.

8. Proof of delivery: It is essential that merchants track all products that are sent out and require that all goods be signed for in order to insure that the goods have been received. Also merchants should use a carrier that offers insurance incase of a dispute or damage to the goods as this will help cover the costs and liability in the case of a chargeback.

9. Warning Message: Post a warning message on the order page to those who may attempt to make a fraudulent purchase as it has been proven to deter the individual and reduce the number of fraudulent transactions. Also make sure to mention that IP addresses are being logged.

10. Anti-fraud tools: There are many anti-fraud techniques that can be used in order to help reduce fraudulent transactions. Merchants should only work with payment gateways that provide the highest level of security to ensure fraud is kept under control. Only payment gateways which are PCI DSS certified (level 1) and which offer the most current anti fraud techniques are suitable for securely accepting payments online.

There are many other techniques that a payment gateway can utilize in order to help a merchant reduce their charge backs. Reducing charge backs can greatly increase a merchants profits so it is very important that a merchant works with a payment provider that can provide them with the knowledge and tools required to help them reduce, control and monitor their charge backs.