10 Tips for Online Merchants to Combat Holiday Chargebacks

The holiday season presents some of the strongest sales of the year for online merchants, but there are hidden pitfalls that can hamper profits. When faced with the influx of returns on the horizon this January, retailers need to keep a smart balance between leniency and policy. Here are 10 tips for maximizing sales and customer satisfaction while minimizing chargebacks and fraud:

1. Make it easy to get information. If you sell online, make sure your customers have multiple opportunities to view your return policy. If consumers can't find the information they want on your website, they're likely to look — and buy — elsewhere.

2. Provide human interaction options. It's important for consumers to be able to find answers on a website, but many prefer to contact a live person when they have questions or problems. Offer online shoppers multiple ways to get a human response by phone, online chat or email.

3. Increase processing resources to limit delays. If you process return merchandise authorizations (RMAs), aim for processing a refund no more than one week after the return was received at your warehouse. Consider that there may be mail delays and allow some exceptions in processing returns.

4. Make returns a stress-free process. Provide an automated return receipt via email once a return is received. For RMAs issued by vendors that pay for the shipping rate, provide a temporary refund to the customer as soon as the tracking number is initiated. If the product never arrives, contact the customer and reverse the return.

5. Avoid "he said, she said" situations with photo proof. If you receive damaged or used merchandise as an attempt by the customer to get a full refund, take a picture of the product and email it back to the customer describing why their return won't be accepted.

6. Take measures to reduce chargeback occurrences. Allow customers to initiate returns online in order to avoid the hassle of having to make a call or, worse yet, be tempted with the option to call their bank. If a customer refuses merchandise or it's returned as undelivered, immediately refund and send an email notice.

7. Improve customer service with satisfaction surveys. Ask your customers how they liked their product after it's received. This tactic works to help improve your customer service by providing valuable insight, but also gives a customer an immediate option to express dissatisfaction.

8. Maintain and analyze customer account histories. Keep well-documented notes on any return history. Some customers may have a history of transaction disputes, chargebacks or fraud.

9. Stick to your return policies. If a product is sent back by a customer who doesn't use the correct policy, refuse the merchandise and return it to them. If a customer is not in possession of merchandise related to their purchase, they cannot be responsible for keeping the charge and it will likely turn into an irreversible chargeback.

10. Fight fraudulent chargebacks. If the vendor can prove the customer was shipped the item with a confirmation delivery receipt and the customer's identity is confirmed, fight the chargeback. Not fighting back rewards customers and their banks and can invite similar behavior across your descriptor on credit card statements.

Monica Eaton-Cardone is the co-founder, owner and chief operating officer of Chargebacks911, a dispute mitigation and risk management services firm.