Chargebacks are a constant thorn in the eye of merchants. High risk merchants face even larger problems with chargebacks, which are nothing but disputes raised by customers about certain financial transactions. Chargebacks are not only not good for business in general, they prove to be heavy on the merchant’s pockets with hefty fees and fines.

The question that now surfaces is why do chargebacks occur? Here are some of the reasons why

Authorization problems: Lapses in merchant policies or human error whereby the complete authorization protocols are not complied with form a huge chunk of the reasons for chargebacks. It is better to ask for other modes of payment, when authorization inputs are suspect from the customer’s side.

Cancellations and Return policies: Irregularities while handling cancellations or returns is a major reason for chargebacks. Occasionally the policies governing these irregularities are not clear, which can cause many chargebacks. Policies should be clear and complied with.

Fraud: These are simply malicious attempts to hijack the business. In exceptional cases it could also be because the customer considers the merchant account as high risk or suspects beyond reason.

Customer Disputes: Disputes such as inadequate quality of products supplied, or failure to do so at all.

Errors in Processing: Simple errors in the billing process or billing the wrong person altogether.

Failing to answer request: Failing to answer customer queries, or requests for information can often lead to chargebacks. Not only is the money side of this ugly, it results in loss of reputation too.