It has become effortless for a cardholder to dispute a charge. Issuing banks can make the dispute process as simple as a few taps in their app. This ease can lead to customers disputing a transaction when they have a problem with the purchase instead of reaching out to the merchant to resolve it. This means opportunity for the merchant to correct the situation and mend the customer relationship was bypassed by the cardholder. So, how can merchants repair a customer relationship after a dispute?
Repairing a Customer Relationship After a Dispute
There are a couple of reasons why a customer disputes a charge:
- They are unhappy with the product or service.
- They have a valid reason to dispute the transaction such as being charged twice, the product was misrepresented, or they never received the product or service.
- They do not recognize the transaction and think it is fraudulent even though they made the purchase. This type of dispute is called friendly fraud and can stem from simple forgetfulness or an unclear merchant descriptor.
- They are maliciously using the dispute process to try and regain the transaction amount while still retaining the goods or services.
- They are a victim of true fraud which is when a fraudster uses stolen credit card credentials at your site or store.
Except for the cardholders that are maliciously trying to use the dispute process, merchants should try to repair the customer relationship.
How to Repair
Merchants should engage with the customers after a dispute is initiated. When your company receives the dispute, it will have a reason code attached to it that explains why the dispute was filed. The reason code can help point you in the direction of how to reach out.
For example, the reason code claims that the package was never received and you have already responded and lost the dispute. In this situation, you could email the customer and apologize that they never received their package and offer to replace the item or offer a discount if they would like to reorder. Even a simple apology email can go a long way to keep a customer happy.
In a recent Javelin study on the effects of disputes, they found that “regardless of whether a dispute is related to fraud, consumers generally hold merchants most responsible. Consumers overwhelmingly perceive merchants to be responsible for the issues they experience with a transaction — more than half for a fraud dispute (56%) and two-thirds for non-fraud disputes. The resulting animus might be driving consumers to seek resolution that is especially damaging to merchants, or it might partially be a function of where they first seek to find resolution.” This finding means that merchants need to put in some work to maintain that relationship.
It is also important to note that after a dispute is already filed, merchants should not refund the transaction. Because if the customer wins the dispute and you have refunded them, they will receive two credits. Once a dispute is filed, merchants have to work through the dispute response process to right the situation.
Getting to the Customer Before They Dispute
While taking steps to remedy the situation after a dispute is great, it is even better if merchants are able to communicate with the customer before they turn to their bank. Here are two ways merchants can do this:
Great Customer Service
To prevent the customer from bypassing the merchant and going straight to their issuing bank, merchants should have great customer service that is promoted and easy to access. Merchants can make their customer service accessible by:
- Putting your customer service phone number or email into your merchant descriptor. If a customer has any confusion about the purchase or may question if it is fraud, putting the contact information encourages them to reach out to you instead of the bank.
- Putting your customer service contact information everywhere you can. Put it on every email, on the footer of your website, send designated emails, have an online chat available, do everything you can to make it evident that your customer service is there to help before customers have a problem.
- Communicating clearly and continually with your customers from the get-go. Make sure your return policy, terms of service, and how to get a hold of your customer service is communicated at check out. Then reinforce the message that your customer service is here and happy to help with your other communications.
Real-time Resolution (RTR) in the Chargeback App enrolls merchants in Visa Merchant Purchase Inquiry (VMPI)—allowing for real-time communication of customer, order, and product detail to Visa’s dispute management platform. With Real-time Resolution you are able to communicate with customers and the dispute analyst at the cardholder’s issuing bank before a dispute is filed. In cases of friendly fraud, the additional data helps jog the cardholder’s memory about the purchase. And in cases where the cardholder is trying to intentionally misuse their chargeback rights, the extra layer of confirmation acts as a critical deterrent from proceeding with the dispute. By having this real-time communication, merchants are able to prevent disputes and retain customer relationships.
To learn more about Real-time Resolution and the possible ROI for your company, you can schedule a demo with one of our dispute experts.