Handling Chargebacks Effectively in Wix Payments
5 min read
When a payment is labeled as a Chargeback in your Wix Payments account, it means the funds were returned to your customer. A customer generally requests a chargeback when they don't recognize the payment, or when the goods/services were defective, not as described or not delivered at all.
As a merchant using Wix Payments, there's a lot you can do to reduce your risk of chargebacks and to handle them efficiently with minimum hassle.
In this article, learn about:
The risk of chargebacks
Too many chargebacks can cause you to be classified as a “risky merchant” by your bank or payment provider. Becoming a high-risk merchant can also mean changes to your payout policy, additional verification steps, or even your Wix Payments account being closed.
Aside from the risks to your account status, each chargeback you receive incurs a chargeback fee. This fee is returned to your Wix Payments account if you file a chargeback dispute and win the dispute.
It's important to keep track of your chargeback ratio. This ratio is calculated according to the total number of chargebacks per total number of transactions. The industry standard for chargebacks is 1% (or less than 1 chargeback for every 100 completed transactions).
A chargeback isn’t always fairly filed against a merchant. If you have proof that the payment is valid, you should file a dispute directly from your Wix Payments dashboard.
Preventing chargebacks
There are best practices you can follow to help lower your risk of getting chargebacks, as well as to handle any chargebacks you receive more effectively. These include:
- Making sure your product info is accurate: Your customers are less likely to dispute a purchase if they receive exactly what they order. Write product descriptions that are correct and add images that realistically depict what you’re selling.
- Adding clear policies to your eCommerce website: Make it easier on customers to find your shipping, refund and cancellation policies, so they know, in advance, how you handle these issues.
- Customizing your statement descriptor: Your online store looks more reputable and professional when your site’s business name matches the name that appears on their bank statement (e.g. your statement descriptor).
- Carefully analyzing orders that seem suspicious: Chargeback fraud is a real problem. As your online business grows, be wary of fraudsters. A cautious merchant will:
- Verify high-value orders: If you receive an order with an unusually high-value, it's worth taking the time to verify the customer's identity. We recommend setting up a face-to-face call, if possible.
- Check the billing address against the shipping address: If they match, the chance of fraud is reduced. If they don't match, you may want to ask why?
- Verify the customer's contact details: It may be a good idea to call the user's contact number, or google their email address to check for anything unusual.
- Verify the customer's IP address: IP checking tools such as whatismyip.com are free to use. A suspicious IP address can signal fraudulent behavior. If any of the following warning signs appear, you should contact your customer to verify the authenticity of the order:
- The customer’s IP address is located in a different area from where they say they are.
- The IP address comes from a web hosting company.
- The IP address is a proxy service IP address.
- Responding to refund requests swiftly: Offering refunds to customers is a best practice and lessens the chance of chargebacks.
- Letting your customers easily get in touch: Chargebacks can sometimes be a result of poor communication, so make it easy to find your contact details by displaying them clearly across your site. Try to respond to customer concerns quickly, and keep your customers updated about shipping, delivery, or any changes to your store policies.
Understanding chargebacks
As a merchant, staying informed is really important. When it comes to chargebacks, you have all the info you need to stay updated right in your Wix Payments dashboard. Some of the most common reasons for chargebacks are:
- Fraud: A customer may claim that they were charged without their knowledge. If you have proof that they agreed to be charged, you should dispute the chargeback.
- Products or services weren’t provided: Keep your customers up-to-date on when services will be provided, or when you expect products to be shipped and delivered. This helps pinpoint where the problem may be, and how you can improve your services moving forward.
- Products are faulty or not as described: What you deliver to your customers should be exactly as described and pictured in your product pages. Whenever there’s a difference, even a small one, your customer may feel they’re not getting what they paid for.
Disputing a chargeback
A chargeback isn’t always fairly filed against a merchant. If you have proof that the payment is valid, you should file a dispute directly from your Wix Payments dashboard.
When challenging a chargeback, be sure to make a note of its deadline. This is the date after which your chargeback is considered final, and you won’t be able to change its outcome.
Prepare for a dispute by gathering all your documents. Note that they should be in English, a requirement made by most banks that process chargebacks. They should also be readable, so try to include good quality images and documents only.
From your Wix Payments dashboard, you can submit all the required documents. If you’re uploading multiple files, they’ll automatically be gathered and compressed into a single file. These may include:
- Proof of delivery
- Invoices and receipts
- Customer communications
- Photos showing the customer using the product
- Your business’ Terms and Conditions
- Your rebuttal letter
Wix Payments’ integrated dispute tool lets you monitor and review your chargebacks’ status right from your Wix Payments dashboard. Track every transaction, dispute chargebacks, upload additional documents and more. You’ll also get notifications via SMS and email any time a customer disputes a charge.
Whenever possible, it’s always best to try and prevent a chargeback rather than deal with it once it happens. But if it does happen - and it’s important to say that most merchants have to deal with chargebacks at some point - the best way to handle a chargeback as a reputable merchant is to dispute it.
Every chargeback is unique, and you should handle it as such. Stick to best practices to reduce your risk ratio, and know that, should you have to face a chargeback one day, you have all the tools you need in your Wix Payments dashboard.
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