There is always going to be some problem with the credit card company. From being charged a fee because the person forgot to cancel their appointment if they can’t make it, to the point where simple fraud can ruin your company’s credit.
Let’s look an example to understand who to manage your company with people purchasing with credit. Someone who runs a doctor’s office may charge a fee if you don’t show up for your afternoon appointment for your root canal or regular cleaning. Many offices of professional companies often have a cancellation policy that is within 24 to 48 hours before your next appointment or upcoming appointment. Now most people have two options: pay the fee that was charged to your credit card or call your credit card company to have the fee removed. Let’s say someone decides to fight the fee, so now you are given a fee in return. This is what is known as a charge back.
Chargebacks were often used to prevent fraud. But have become a large problem with small businesses. If you have a business that follows strict appointment policies like canceling within 24 hours in advance, then there should be a way to fight the card companies back right? Sadly, most card companies go with the ruling of the card holder, not the business. The chargeback is considered to be a ‘friendly fraud’ attempt. But it doesn’t matter if either party wins or loses, someone is left paying a fee. For those in a small business, there is a fee that could run from two cents to $30.
But what is this type of fraud? As I explained someone might not have known how expensive an order could be or the fee for not showing up to your appointment. They can call their company that is in charge of the credit card to cancel the order or the charge on their credit card. But while these can be easily fixed or paid, the problem is how many people go about exploiting this type of fraud in the process, which can often lead to a number of companies closing up their shops. This fraud is not ‘friendly’ in the least, it is actually the one problem that even small business cannot afford to risk. Chargebacks are often given regardless of the defense against the customer or the business owner, and these types of fraud are often the one reason why many businesses often go out of business.
There are ways to combat the chargeback, but some places offer hefty tags for their services to cut out the credit card company or other sites like PayPal out of the middle. Business owners could fight anyone in charge of fining the fee, but no matter what, there will always be a loser. So if you are unable to protect your company from this type of fraud, always make sure you tell any clients that they have options in advance in order to avoid fraud and your company’s profits.
