How to Beat Chargebacks
Dealing with chargebacks is one of the most frustrating aspects of running a service business. While chargebacks are sometimes unavoidable, implementing best practices can significantly reduce your risk and improve your chances of winning disputes. Here are strategies to help you beat chargebacks and protect your agency’s bottom line.
1. Document Everything
Maintaining detailed records is your first line of defense against chargebacks. The best evidence is always in writing and can include:
- Invoices and Receipts: Provide a clear record of transactions.
- Email and Text Correspondence: Keep all communication for reference.
- Recorded Zoom Meetings: Use recordings as evidence of client agreements or approvals.
Having a paper trail demonstrates your professionalism and ensures you have proof to counter false claims.
2. Be Clear When Billing
Confusion over billing details can lead to disputes. Avoid misunderstandings by:
- Using a Recognizable Business Name: Ensure your invoices and statements reflect the name clients expect to see.
- Avoiding American Express Cards: AmEx often sides with their customers in disputes, making chargebacks harder to win.
3. Respond Promptly
When you receive a chargeback notification, time is of the essence:
- Submit Evidence Quickly: Missing the response deadline almost always results in losing the chargeback.
- Provide Comprehensive Documentation: Include contracts, proof of service delivery, and communication records.
4. Provide Strong Customer Support
Good communication can prevent chargebacks before they escalate:
- Resolve Issues Directly: Address client concerns promptly and professionally.
- Highlight Refund Policies: Share copies of your service agreement, specifically the refund and cancellation terms, during discussions.
5. Deliver as Promised
Ensure your deliverables meet or exceed expectations:
- Use General Descriptions: Being overly specific in deliverables can make disputes harder to defend. General descriptions allow for flexibility while still ensuring clients receive value.
- Meet Deadlines: Timely delivery reduces client dissatisfaction and dispute risks.
6. Maintain Transparent Policies
Clarity and repetition are key to minimizing disputes:
- Communicate Refund Terms: Reinforce refund policies during the sales call, onboarding, presentation, and via client information boards.
- Reminders: Reiterate terms throughout the client relationship to reduce misunderstandings.
The Cost of Chargebacks
Dealing with chargebacks is costly and unpleasant for all parties involved. Once a client is sent to collections, communication must cease on your end, effectively ending the business relationship. Although it’s an unpleasant scenario, recovering debts is necessary to ensure your team gets paid for their work.
Conclusion
While chargebacks are never fun, they’re a part of doing business in the service industry. By documenting everything, maintaining clear communication, and delivering as promised, you can reduce your risk and improve your chances of resolving disputes in your favor. Protecting your agency from chargebacks is essential for sustaining long-term success.
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