6 Reasons Why Your Credit Repair Merchant Account Is Prone To Many Chargebacks
Are you planning to create a merchant account for your new credit repair business? If yes, below are the reasons why your Credit Repair Merchant Account may suffer high chargeback rates compared to other merchant accounts.
1-Failure to consider the chargeback ratio
Most credit repair company owners don’t realize that a chargeback, whether won or lost, contribute to the chargeback ratio and as a result fail to give refunds straight away for dissatisfied customers; instead, they try to find their way around all chargebacks.
2-Poor handling of legitimate claims
Most credit repair customers are not familiar with the chargeback solving processes and don’t know when or how to call the customer care number on their credit card reports. Sometimes they call and are not answered in time or maybe handled carelessly by the client service representative, which leads to unsolved claims that may be automatically refunded as chargebacks.
3-Client tricks to maintain their cash flow
Credit repair customers are often short on funds and by definition normally have bad credit. For that reason, they tend to use dubious tactics to make sure they can maintain their flow of cash, which may go as far as disputing legal charges.
4-Lack of adequate contact information
Most credit repair businesses do not send clients electronic receipts with their company’s contact data. This mistake leads to the customer forgetting services they ordered for only to recall it weeks later when going through their credit card statement.
5-Use of Recurring billing without sending monthly invoices
While Credit repair companies prefer recurring billing as a payment option for their services, they fail to send monthly invoices to clients as reminders when a charge goes through. Customers use this as a loophole to initiate a chargeback to recover finances for a service the no longer need.
6-Clients often resort to the issuing bank for help
Many credit repair businesses are small companies without well-known brand names. Therefore in most cases, disgruntled consumers do not enjoy opportunities to get refunds as they would with large corporations such as round-the-clock customer care or famous company names. The clients’ last resort, therefore, becomes the issuing bank.
Credit repair is a risky business, considering the type of clients you are dealing with and all these chargeback risks. With the above tips, you can avoid the pitfalls that could cost your business many losses.