At most companies, the customer service team is the linchpin for helping customers solve problems, from the time they place an order to after the order is received.
An often overlooked impact of customer service is the role it plays in chargebacks. The policies and processes that a company has in place can either help them avoid chargebacks or deplete bottom line revenue.
Customers may file a chargeback for many reasons including non-receipt of goods, damaged defective goods, non-receipt of return credit or credit not processed. No matter what the reason, customer service can play a big role in preventing the financial loss of a chargeback.
When a customer contacts customer service, you should obtain a clear understanding of the issue and try to resolve the issue on the first contact. For example, if the customer has not received their order, determine where the shipment is. If the package appears to be lost, then customer service will need to contact the carrier.
Once due diligence is completed and a determination has been made that the package is definitely lost, the best option is to contact the customer and issue a full credit, including the cost of the shipping and handling. To minimize the overall loss, customer service should file a stop shipment on the package and a carrier claim to recoup a refund from the carrier for the lost goods.
Unfortunately, as much as a customer service team tries to keep customers happy, some people abuse the system.
Consider this scenario: a customer places orders frequently for multiple items, and consistently claims non-receipt of orders. Your customer service and company policy is to do a zero-cost reship of that order to the customer.
At this point, you have a decision to make—block the customer from placing future orders, or inform the customer that you will not be issuing a credit or doing a zero-cost reship. If you choose to not block the customer, they can potentially file a chargeback. Unfortunately, once the customer files a chargeback, you cannot use the leverage of the customer is a claims abuser because you allowed the order to be processed.
One way to guard against chargebacks from a claims abuser is to send an affidavit stating that the customer will not receive any refunds on any future orders. Until you receive this affidavit back with the customer’s signature, it is best to block this customer. You can use this formal affidavit and other compelling evidence to dispute future chargebacks to get them reversed.
If further research is needed, a quick turnaround time and proactive follow-up with customers is a must to ensure the customer does not escalate the problem by filing a chargeback dispute. Merchants should always file stop shipments and carrier claims for lost orders, issue credits promptly and correctly, and utilize a formal affidavit process with claims abusers to protect against future claims.
Customer service plays a big role and it’s is in the best interest of merchants and their customer service team to proactively solve a customer’s problem through an immediate response, a refund offer, and first call problem resolution. Those companies who do it well will be able to prevent financial loss from chargebacks.
Michael Estabrooks is a financial recovery and reporting analyst at Radial.
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