- 1 Best practices for managing refunds and chargebacks
- 1.1 01. Rapidly Respond to Refunds
- 1.2 02. Managing Chargebacks
- 1.3 03. Handling Disputes
Best practices for managing refunds and chargebacks
Many businesses will be affected by COVID-19, which places new restrictions worldwide.
Guests are cancelling their attendance at events, and clients are withdrawing from bookings. This uncertainty has also led to a rise in chargebacks and refunds, creating tension between customers and business owners.
Wix is working hard to simplify complex processes for businesses. This article will teach you how to avoid negative account balances by managing your chargebacks and refunds.
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01. Rapidly Respond to Refunds
Business owners have to deal with more cancellations and refunds as clients and guests change their plans. It’s generally a best practice for business owners to offer refunds for any canceled services or orders, regardless of whether they were canceled by your customer or you. You can temporarily suspend the customer’s paid plans until you get your business back to normal. It’s a good idea for transparency to revise your refund policy.
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Why should I refund customers?
Customers are more anxious than ever about the future. You can reassure them by responding quickly to their refund request. If they are not reimbursed, you can initiate the refund process. Let your customers know that their funds have been sent.
What can I do to refund my customers?
If you cancel an event or service, refunds are not automatic. Each refund must be issued by the business owner through their preferred payment provider. Learn how Wix users can refund customers for services, appointments, tickets, and store order in just a few steps. Wix will refund any event ticket that has been refunded for service fees.
There is no additional charge for issuing refunds if you choose WIX Payments. The refund process can be managed from your dashboard. This allows you to quickly respond to customers and gives you full control of your finances. Refunds to customers are subject to standard Wix Payments processing charges.
Example A customer in the United States pays $100 for a product. 2.9% + $0.30 is Wix Payments’ processing fees (standard U.S. fee of $3.20). The amount that was paid to the merchant’s bank account is $96.80. The merchant will refund their customer $100 if they initiate a refund process.
Tip Show customers you value their time and business by giving them a coupon for their next purchase. No matter what the current challenges, give them the best customer experience.
The bottom line: Cancel and refund orders if you are unable to fulfil them. You can reduce chargebacks by making refunds as fast as possible and making sure that your customers are happy.
02. Managing Chargebacks
What is a chargeback?
Your business may be subject to chargeback requests from customers. A chargeback request is made by credit card issuers to merchants to return funds to customers. This is when a customer claims the products or services they purchased were not provided by you. Wix Payments merchants can view chargeback reasons via their Wix Payments dashboard.
What are the negative effects of chargebacks on business?
A chargeback is different from a refund request, which involves you and the customer. Instead of a refund request, third-party banks and payment networks companies like Visa and Mastercard are involved. Although chargebacks can happen from time to time, it is important to avoid a high rate of chargeback. Your risk level will increase the more chargebacks that you get. This could have a negative impact on your business operations, and can lead to account closures or withholding payments.
Handle Chargebacks without Penalties
Many business owners are facing chargesbacks due to recent events.
Payment providers usually charge a fee for each chargeback. Wix payments does not penalize users who file chargebacks against them.
Tip To reduce chargebacks, follow these best practices for merchants .
The bottom line: High chargeback rates can hurt your business. Sometimes it is best to just refund the customer.
03. Handling Disputes
What should I do if I receive a chargeback
You have two options as a merchant: accept or deny a chargeback. If a customer requests a chargeback via their credit card issuer they will usually be refunded immediately (unless they dispute it). If you accept the chargeback the funds will be retained by your customer.
What is the best time to file a chargeback dispute
You can file a dispute if you disagree or have evidence of the validity of the transaction. Wix payments does not charge any fees for disputes. Here are some chargeback scenarios that business owners might encounter.
Tickets for Events
- A customer has tickets for an event which was cancelled.
- The customer has tickets to an event that was rescheduled. Customer is unable attend the event on the rescheduled date.
- If a customer cancels tickets for a scheduled event, your business is protected under a clear, non-refundable cancellation policy.
- A customer decides to not attend an event for personal reasons.
Booked Services & Hotel Reservations
- Customer did not reach out to you in the manner that was stated in your booking policy. This is why they are a no-show. Merchants located in the affected areas are advised not to bill their customers.
How can I file a chargeback dispute
You can file a Wix Payments dispute right from your Wix Payments dashboard. Pay attention to the deadline when you file a dispute. The chargeback becomes final after this date and you can no longer dispute it.
Your Wix Payments dashboard allows you to easily track your chargeback status. If your dispute is resolved by the bank or credit card issuer, funds will be returned to Wix Payments.
Tip Respond quickly to chargebacks using Wix Payments’ dispute tool. You can easily monitor, accept, and dispute chargebacks from your dashboard.
The bottom line: Avoid invalid chargebacks and protect your business without paying any fees.
Navigate your business through these difficult times. Be patient, flexible, resourceful, and look forward.
You are facing some difficulties, but your customers are also. Trust and invest in your customer relationships. Your response will decide whether or not you have a loyal customer.