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For many small businesses that accept credit cards, chargebacks are a costly and unfortunate affair. A chargeback occurs when a customer disputes a previously-made transaction, whether due to a stolen credit card or an error from the merchant’s part. However, there are precautions and ways that you can take in order to avoid and protect yourself against the unfair chargebacks:
- Try not to complete the transactions with declined authorization requests. On the off chance that a customer hands you a credit card that has been declined, request for another method of payment, such as a check, cash or debit card.

2. Before charging the customer, preferably deliver the products and services that the customer requests. Customers may dispute charges made on their card before they received their merchandise. Make sure you receive a proof of delivery before charging the customer.
3. Check whether your merchant account payment gateway has safeguards that check for duplicate charges or not. This helps to avoid chargebacks that related to the same transaction made twice.
4. Aid your customers with all the information they need regarding your refund policy, return, exchange and cancellation policies. For online sales and payments, send the customers an e-mail with their receipt and payment information confirming how much was charged to their account.
5. Communication is important. Please respond to the cancellations quickly, notify the customers of the delivery delays, and make sure your customers can speak with you or your staff if they face any problem. Do not make them wait for your feedbacks or replies. It will give them troubles. Many chargebacks occur due to the acceptance of stolen credit cards, for which businesses are fully accountable.
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