How Merchants  Can Guide Themselves Against Chargebacks In Nigeria

Jiji is a popular classified-ad platform in Nigeria. It’s similar to the Facebook Marketplace. Merchants upload their inventory and potential buyers (window) shop. At the point of contact, users are presented with this big caveat:

“Safety Tips

• Don’t pay in advance, including for delivery
• Meet the seller at a safe public place
• Inspect the item and ensure it’s exactly what you want
• On delivery, check that the item delivered is what was inspected
• Only pay when you’re satisfied“

This would put anyone in defense mode. It signifies a lack of trust in the engagement. All participants need to take steps to protect themselves.

If your business accepts payments online, or you’re simply curious about how chargebacks and refunds work, then you’ll find this simple guide useful. This article discusses what you need to know about how to reduce revenue loss to chargebacks and refunds.

Outline

I. Introduction

II. Causes of Chargebacks and Refunds

III. How to Reduce Revenue Loss to Chargebacks and Refunds

Explanation Of Chargebacks And Refunds

Chargebacks and refunds are common occurrences in online transactions. As a merchant, it’s essential to know what they are, how they work, and how to avoid revenue loss from them.

A chargeback occurs when a customer disputes a transaction with their bank, and the bank initiates a refund to the customer’s account. Chargebacks can happen for several reasons, including fraud, customer dissatisfaction, and technical errors.

Chargebacks can be costly for merchants, as they can result in a loss of revenue and even lead to penalties from payment processors or banks. Therefore, it’s crucial to take steps to reduce chargebacks and their associated costs.

Causes of Chargebacks and Refunds

Chargebacks and refunds can happen for various reasons, but some of the most common causes are:

1. Fraudulent transactions: When a customer’s credit card is stolen or compromised, the thief may make purchases with the card. When the card owner discovers the fraudulent charges, they can request a chargeback.
2. Dissatisfied customers: If a customer is unhappy with a purchase, they may request a refund or initiate a chargeback.
3. Technical errors: Technical glitches during the payment process can sometimes result in duplicate charges or other errors that lead to chargebacks or refunds.
4. Merchant error: Sometimes, merchants may make mistakes that result in chargebacks or refunds. For example, if a customer is overcharged, they may request a refund.

How to Reduce Revenue Loss to Chargebacks and Refunds

To prevent chargebacks and refunds, there are several measures that merchants can take:

1. Implement fraud detection and prevention tools: Merchants can use various tools and services to detect and prevent fraudulent transactions, such as address verification, card verification codes, and fraud scoring systems.
2. Provide excellent customer service: By providing excellent customer service, merchants can help prevent dissatisfied customers from initiating chargebacks or refunds. This includes promptly responding to customer inquiries and complaints, offering easy returns and exchanges, and resolving issues as quickly as possible.
3. Use secure payment processing systems: Merchants should use secure payment processing systems that comply with industry standards, such as PCI-DSS. These systems help ensure that transactions are processed securely and that sensitive customer data is protected.
4. Double-check all transactions: Merchants should double-check all transactions to ensure that they are accurate and that no mistakes were made during the payment process.

Paga is focused on helping both consumers and sellers pay, get paid, and access financial services. We do this directly; and through our Platform-as-a-Service, which enables other third parties to leverage the deep infrastructure we have built for endless possibilities.

You can rely on us to provide the safety you need.

We hope you found this helpful. You can always contact our Developer Marketing Team via Mail or join our PagaX Developer Community.