Guide to Credit Card Chargebacks

Make sure each charge is authorized

If you accept cards at a brick-and-mortar location, compare the signature on the back to the signed sales receipt and check to make sure the card hasn't expired. Get an authorization number before completing the sale. Electronic verification systems, based on information in the card's magnetic strip, allow you to confirm the card's validity at the time of purchase. If you accept cards online or over the telephone, use an address verification service.

I recommend: There are many credit card services companies that will verify transactions. BuyerZone, EasyStoreCreator, CardService International and PreCharge can help you locate solutions.

Make sure customers know who you are

If a buyer purchased an item under one business name, and something else entirely appears on the statement (a parent company, for example), a chargeback could follow. People are often confused about charges when information on the statement does not match what they remember.

I recommend: Make sure credit card companies use the same brand name for your business that customers do. Also, consider having a toll-free 800 number appear next to your company name in the billing statement, so customers can call you with questions, rather than dispute the charges with the credit card company. You can obtain an 800 number from a host of companies, including AT&T and Sprint.

Spell out your return policy

If you have a clear return policy, customers will be more likely to deal with you on returns rather than complain to their credit card companies.

I recommend: Include return instructions on the invoice and on your company's Web site. "The Return Policy: The Forgotten Fundamental of Online Sales" will give you guidance on setting up a policy.