Communication with customers can prevent disputes and create strong customer relationships.
As we have said previously, great customer service not only empowers customer relationships, it also prevents disputes. A piece that goes into having effective customer service is to create easy to use channels to communicate with your customer. A new Javelin study emphasizes why this is so important.
Customer Communication Prevents Disputes
A recent Javelin study found that merchants were able to resolve an issue 56% of the time without a refund, a replacement, or a customer dispute being issued if their customer service was contacted about the transaction issue. Another 28% of the time a dispute could be avoided by refund the customer. Which leaves only 16% of the time where merchants were contacted about the issue, and it still resulted in a customer dispute. These statistics show us that 84% of the time, if merchants can get the customer to contact them, then a dispute can be avoided. The study also shows us that merchants should be doing everything they can to get customers to contact them before submitting a dispute.
One of the most effective ways to communicate with a customer before a dispute is through Real-time Resolution. Issuing banks have made it very easy for customers to dispute transactions. As a result, there is constant misuse of chargeback rights, whether intentional or not. With Real-time Resolution, the issuing bank’s dispute analyst and the cardholder can receive information about the transaction, your return policy, and your customer service contact information.
RTR effectively prevents friendly fraud by reminding the customer about the transaction they made. It also helps the dispute analysis to make a fully informed decision about the validity of the dispute, which prevents chargeback fraud. RTR becomes a critical tool for merchants to not only get alerted to refund a cardholder when they feel necessary, but it also pushed the cardholder to reach out to the merchant. This communication also shows that the merchant is willing to work with the customer to resolve the issue.
Other Customer Service Methods that Prevent Disputes
When a merchant’s return policy is too strict, frustrated customers may be disputing charges to try and get around the policy. Here are a few tips when it comes to return policies and procedures to avoid a frustrated customer trying to get their money back:
Issue Credit Back Quickly
When a customer returns a product, they expect the money to be credited back to their account as soon as possible. If the funds are not returned quickly, the customer may think that the return was not processed correctly and that the money is never coming to their account. This can result in a dispute and a damaged customer relationship.
A Clear Return Policy, is a Better Return Policy
A clear return policy is vital for all merchants. It helps customers understand the return policies before purchasing, it helps regulate returns, and if a dispute comes in, it provides needed compelling evidence for a dispute response. It is equally important to disclose your return policy to your customers. Don’t make your customers search for it and prominently display it at check out.
Easy Returns are Expected
The average cardholder has become accustomed to simple and easy returns. Any return policy that is difficult or creates an inconvenience for the customer is at risk for disputes. If returning a product is harder for them than going through their issuing bank to dispute a charge, then you may want to reevaluate the policy. Sometimes merchants can’t match the absolute hassle-free return because of the industry or type of good they sell. If you are one of these merchants, make sure your return policy is clear to the customer before they buy. A well-communicated return policy makes sure that there are no surprises, and the customer doesn’t feel cheated when they have to return the product.
Easy to Reach Customer Service
The next step to making your customer service as effective at preventing disputes as possible is to make your customer service easy to reach.
Preventing Friendly Fraud Disputes
Friendly fraud is when a cardholder disputes a charge with no malicious intent. It was merely a misunderstanding or forgetfulness, causing them to dispute a transaction. To prevent these confused customers from disputing, merchant’s merchant descriptor should include an email or phone number to reach customer service. This helps the customer reach out to the merchant to try and figure out what is happening, instead of just disputing a charge.
Preventing Chargeback Fraud Disputes
Chargeback fraud is when a cardholder is intentionally using the dispute process to gain back the transaction amount while still retaining the merchandise with malicious intent. Chargeback fraudsters can have many different motives — such as buyers remorse, forgetting to cancel a subscription in time, or wanting to sell the merchandise online to make a profit. Not only can customer service help prevent some of these disputes from ever happening, but it can also provide the compelling evidence needed for a winning dispute response for disputes that do occur.
Make it Easy for Your Customers to Reach Out
The goal of customer service is to help customers when they have a question or problem. By having your customer service available at every part of the transaction and buyer journey will make it easy for customers to talk to you. And makes your customer aware that you are willing to work with them to make the situation right.