Gaming is intense, competitive, and prone to impulse. Although that is what makes it fun for customers and profitable for entrepreneurs, it also leads to an above-average number of chargebacks industry-wide.
As these customer-initiated funds reversals can be costly both financially and reputationally, you need to find ways to reduce them as much as possible with chargeback protection strategies.
Chargebacks defined.
Chargebacks happen when customers disagree with a gaming-related purchase and demand a refund. They can occur for various reasons: incorrect billing, non-delivery, customer confusion, and un-authorized transactions. Instead of coming to you to resolve the issue, the customer goes directly to their issuing bank.
It is then incumbent upon you to fight the dispute, often at great cost to your time, your bottom line and perhaps even your reputation.
A better strategy is to do all you can to stop chargebacks before they happen. The good news is that most payment solutions for iGaming businesses can be very helpful.
Elevated customer service.
Start by offering stellar customer support. Promptly addressing concerns and answering questions is an excellent preventive measure.
Furthermore, you should thoroughly explain refund policies to your representatives, potentially offering one-time refunds for unintentional purchases or those made by children.
Use repetition.
Before a transaction is allowed to go through, you should over-communicate its consequences. Verify that the customer understands the purpose and amount of their purchase, and reiterate that the process is irreversible.
Require that the player reads the terms and conditions and checks an “I agree” box, an extra step that, while it may be frustrating, creates a record that can be used later if the customer files a chargeback.
Enact fraud prevention strategies.
Identity theft and other types of security breaches can be minimized with robust anti-fraud technology and procedures.
Requiring that customers sign up for two-factor authentication and create complex passwords can help to eliminate card-related fraud that often leads to chargebacks. Moreover, you should invest in updated security software that analyzes buyer behaviors to detect crimes before they happen.
Set up user identification.
Implementing PINs, one-time passwords (OTPs) and biometric requirements helps to ensure that each user is identified at all times. It then becomes difficult for third parties like children to make un-authorized purchases.
Another effective preventive measure is to give users the option to be notified by text or email whenever a payment is made. This instant alert gives the user an opportunity to immediately let you know that they did not make a purchase so that an instant refund can be generated long before a chargeback is requested.
Obtain chargeback protection.
Your iGaming payment processor can also set you up with software that can prevent chargebacks on recurring payments and one-time transactions. This iGaming-specific software and the human experts behind it will handle chargebacks related to subscriptions, virtual items, and in-game currency, leaving you free to grow your business.
Like it or not, chargebacks are inevitable in the iGaming industry. However, you can reduce their damaging effects on your business by mounting a robust strategy consisting of customer service, clear policies, anti-fraud and user identification measures, and chargeback protection.
