How to Minimize E-Commerce Chargeback Losses

Merchants in e-commerce may benefit from learning how to minimize chargeback losses, especially as fraud is becoming more rampant. Chargeback refers to when money is returned to a customer after contesting a charge. Sometimes, customers may dispute the charge if they didn’t receive the product they wanted, but other times, they may do so to keep the product without having to part with their funds.

Juniper Research 2023 projections show that losses incurred as a result of e-commerce fraud globally surpassed $48 billion. Additionally, a study by Kount, which surveyed its customers, determined that in 2021, companies incurred 2.3% revenue loss due to chargebacks. Kount is a fraud detection company based in Boise.

So, how can businesses minimize chargeback losses?

Collecting evidence

A good paper trail may help business owners dispute chargebacks without many hitches.

Pet Portraits cofounder Thomas Philips revealed that his company kept documentation of every transaction with customers. This includes email threads and delivery tracking information.

Viral Marketing Stars CEO Katya Varbanova also emphasizes the importance of integrating software that documents consumer activity into payment processors. The company, which provides Canva Templates, coaching services and courses, uses an online platform, Kajabi, to gather evidence showing that its digital products have been used.

Stripe, a well-known payment processor, is also used by business owners to handle chargebacks.

Business owners are advised to use written agreements that detail all aspects of transactions to help prevent misunderstandings between them and customers. These agreements can also be used as evidence in any disputes raised.

Evaluating your business

While customers may be fraudulent in some cases, business owners are also advised to give them the benefit of the doubt when disputes are raised. Sometimes, business owners may gain more from offering full refunds to consumers, particularly if the chargebacks aren’t frequent or you operate a small business.

This is mainly because chargebacks incur processing fees and can, in some cases, damage a business’ reputation.

Customer service

Providing good customer service is one of the best ways to avoid chargebacks. Communicating with actual people instead of automated responses allows consumers to feel more connected to businesses and more likely to discuss the issue they have instead of initiating a dispute.

In addition to building rapport with customers and handling any issues in a timely manner, businesses should establish transparent policies on refunds. Furthermore, they should train employees on how to prioritize satisfaction of customers and efficiently handle complaints while safeguarding the business.

Working with a major platform such as NextPlat Corp. (NASDAQ: NXPL) (NASDAQ: NXPLW) can also allow e-commerce businesses to gain access to better systems that can forestall many of the fraudulent chargeback claims.

NOTE TO INVESTORS: The latest news and updates relating to NextPlat Corp. (NASDAQ: NXPL, NXPLW) are available in the company’s newsroom at

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