The good news about running an online store where plastic rules supreme is that customers are much more likely to spend money, and more of it, when making purchases with a credit card. The bad news is they also are more likely to request a chargeback. Chargebacks are a necessary nuisance of running a business but in high volumes they can be costly and in extreme cases get you blacklisted in the merchant account world.
There are two basic problem areas with chargebacks – legitimate returns and credit card fraud where customers claim they never received merchandise and dispute the charges or buy merchandise with stolen cards.
First, a flexible return policy can be a huge selling point for your site, but taking certain measures to cut back on returns can’t hurt. For starters include great shots of your merchandise from different angles and a listing of product details. Also put your return policy out there and make sure your customer’s agree to it. Then in all instances offer store credit or exchanges before making a chargeback.
In situations where customers dispute charges because they claim to never have received the product, implement delivery methods that require delivery verification and have tracking numbers. In instances of stolen credit cards require CCV security numbers for purchases, and/or run cross checks against physical addresses given or computers used to order products against those of the actual card holders.
Many merchant accounts or security software offer fraud alerts that monitor risky behaviors like late night or large orders, out of country or false physical or email addresses, or a spike in card activity.