Chargebacks create concerns for any business, in every industry. For multi-level marketing companies and direct sellers, though, they often take on outsized importance. For these businesses, too many chargebacks can remove your ability to process payments. Fortunately, if you communicate well and plan carefully, you can reduce the incidence of chargebacks for your direct selling business.
Post and Enforce Visible Terms
One source of chargebacks is customers returning items due to lax or unclear return policies. Managing your revenue is always a challenge but doing so when you can have chargebacks well after you have accounted for revenue quickly becomes unwieldy.
You can limit this, in part, by making sure you provide clear terms for anyone purchasing from you. This should include a statement online to which customers must agree before they complete a purchase there, as well as written terms you provide at the point of sale for any in-person purchases. Then, when you have someone attempting a return that goes against your terms of sale and return policy, you need to stand behind those terms.
Sometimes, your delivery process may not go smoothly. A product may be damaged or delayed in delivery. Even if it does arrive on time, your customer may not be satisfied with the product. When these problems occur, that customer's first instinct may be to want to cancel or return an order. If they do so, it can create a chargeback that both costs you money and contributes to problems with your payment processing company.
Here, communication with your customers becomes paramount. Listen to the concerns and frustrations your customers voice, and work with them to resolve their complaints. Often, you can find a path to both satisfy their concerns and avoid having to process a chargeback on their purchase. Every time you do this, it helps your business and your relationship with your payment processor.
Work With the Right Processor
Finally, you should take the time to look at what different payment processing partners can do to help. You will find quickly that some processing companies refuse altogether to work with direct sellers or multi-level marketing businesses. Others may charge exorbitant fees for processing, cutting too significantly into the profit margin you can reach.
Beyond the basics, though, you should look for partners who offer tools to help you limit chargebacks. They provide data analysis to look for suspicious activity and collect information that helps confirm a card's authorized user is making the payment you collect. They monitor constantly to give you the best chance to avoid fraudulent activity and minimize your risk.
Chargebacks may be an inevitable aspect of doing business in any area. As a direct seller or multi-level marketer, you face higher risks and incidences than most. Still, you have ways to keep this from derailing your business. Be vigilant, and use the tools available to you.