Chargeback Insurance for High Risk Payments
Although modern businesses have so many possibilities to get closer to potential buyers, there are still plenty of challenges that they have to undergo to keep their businesses profitable. One such problematic matter is chargebacks. There are several solutions available on the market designed to protect you from them including chargeback insurance. It may seem to be a great solution to the problem, but is it really? Can other methods ensure customers’ satisfaction and protect you from them claiming their money back?
Why chargebacks are bad for your business?
Chargeback means the return of money to a customer based on one’s claim. There may be different reasons why such situations appear – from a customer’s dissatisfaction with the purchase to fraudulent activities. So, why is it a negative factor for your business? When customers make payments using their credit cards, all transactions go through your acquiring bank’s merchant account. Later, you will get funds on your business bank account. Notice, when the customer files for chargeback, the acquiring bank takes the necessary amount of money from your account. Should you have no sufficient funds, the financial institution will cover the expenses.
Of course, later the bank will demand the money from you, and it is great if you have them, but what if you don’t? You may have invested the funds in something, paid bills, etc. In this case, the bank creates a financial gap. This situation is nor preferable for the bank because it’s the one that covers losses.
That is why before opening a merchant account for you, banks will carefully study your history of chargebacks. Banks consider many industries as the high-risk ones due to chargeback risk. That’s why business owners might face problems opening a merchant account.
One of the protection options, a merchant can pick, is chargeback insurance. Let’s find out is it worthy, though?
What should you know about chargeback insurance?
If you lived in a perfect world, chargeback insurance would protect you from all chargebacks. Well, the reality is different. Chargeback insurance works like insurance policy, which means you sign an agreement, and pay a monthly premium to the insurer. The insurer covers chargebacks and fees, but not all of them. This solution allows you to be protected somewhat, but there are still lots of expectations put on you in terms of dealing with chargebacks. It is a sort of auto insurance — it can help you in a difficult situation, but it will not make you a good driver if you are not. Does it make sense to purchase chargeback insurance? This depends on your individual situation really. However, you should not believe that you are done with chargebacks if you get such insurance because there are things that you should and can do to protect yourself from them.
How to protect yourself from chargebacks?
There are a few methods that you can utilize to keep the number of chargebacks to a minimum, and they do not really require spending money, but your time. So, you can do the following:
- Improve your customer support;
- Ensure prominent billing descriptor and good and clear refund policy;
- Provide sufficient communication with your customers during and after purchases.
Who PaySpacelv can help you?
In order to fight chargeback effectively, you need to have some knowledge and experience. Moreover, there are innovative features allowing you to keep the situation under control more easily and effectively.
We at PaySpacelv know what actions to take to avoid possible problems associated with a large number of chargebacks. That’s why we’ve developed comprehensive solutions for you, which allow you to identify and prevent chargebacks and fraudulent activities. You will be able to take advantage of the following:
- Intelligent anti-fraud solutions;
- A unique system that you can use for predicting and decreasing the number of chargebacks and fraudulent activities;
- Taking advantage of third-party advanced services and signals for better results;
- Professional dispute management.
The best way to deal with chargebacks is to prevent them, and we can help you to do that. You will be able to settle disputes related to chargebacks in a quick and painless manner. We will allow you to stay updated about every detail related to this problem.
How to find out more information?
Each and every business has certain specifics that have to be taken to account to choose the best chargeback/fraud strategies and tools. That is why we need to exchange some information with you to pick the best possible services and conditions for you. On our website, you will find several contact methods, and you are very welcome to use each of them to reach our support team. You should note that we work with different businesses, including those who are going through difficulties due to a large number of chargebacks, problems with a payment processor, a low credit score, and other problematic situations.