If you sell your products online, you're vulnerable to "chargebacks" -- disputed credit card charges. Buyers usually win disputes. Visa and MasterCard have threatened fines and account termination for sellers whose chargebacks exceed either 1% of transactions or 2.5% of monthly sales. How can you thwart chargebacks? Here are some tips from the experts.
Ship only to credit card billing addresses. California Computer Center's monthly chargebacks dropped from seven to three after it stopped shipping to third-party addresses. CEO Kaveh Jabeli believes the remaining chargebacks come not from scammers but from "frustrated" customers.
Beware of certain shipping destinations. Jabeli says that the Nigerian city of Lagos is "known for fraud."
Display strict return policies. Michael Lee, CEO of MSL Computers Inc., in College Point, N.Y., charges a 15% "restocking" fee for returns.
Take American Express. Merchants report that fighting chargebacks with Visa and MasterCard can be nightmarish, since it means massaging two banks: yours and the customer's. AmEx, by contrast, handles disputes directly. "AmEx opens a case and acts as a mediator," notes Jabeli.