What are the most effective practices to prevent chargebacks with Squareup?

Most Effective Practices to Prevent Chargebacks with Square

1. Accept Card-Present Transactions Safely

• Always use Square’s secure point-of-sale system to process chip (EMV) or contactless payments when the customer is present. Require customers to dip or tap their cards rather than swiping, as chip and contactless transactions are less likely to be disputed and provide stronger evidence in the event of a chargeback.

2. Collect and Retain Detailed Transaction Records

• Maintain comprehensive records for every sale, including customer information (name, email, address), signed receipts or invoices, and proof of delivery or service completion. This documentation is essential if you need to respond to a dispute.

3. Use Delivery Confirmation for Shipped Goods

• Require signatures upon delivery, use delivery services that provide tracking and photographic proof, and keep all tracking numbers. This evidence can prove that goods were delivered to the correct recipient at the correct address.

4. Clearly Communicate Business Details and Policies

• Display your business name, contact information, and clear return, refund, and cancellation policies on receipts, invoices, and your website. Make sure customers acknowledge these policies before completing a purchase, as this transparency can prevent misunderstandings and support your case if a dispute arises.

5. Invest in Customer Service and Communication

• Proactively communicate with customers about order status, shipping updates, and any changes. Promptly address customer concerns to resolve issues before they escalate into disputes. Good customer service helps prevent chargebacks resulting from dissatisfaction or confusion.

6. Use Square’s Risk Management Tools

• Enable Square Risk Manager to monitor and flag suspicious transactions, especially for online sales. Customize rules to block or allow certain payment cards and review flagged transactions before fulfillment.

7. Secure Card-Not-Present Transactions

• For online, invoice, or virtual terminal sales, use address verification (AVS), CVV checks, and require as much customer information as possible. These measures help verify the cardholder’s identity and reduce fraudulent transactions.

8. Regularly Review and Analyze Chargeback Data

• Track and analyze your chargeback history to identify patterns and recurring issues. Use this data to refine your policies, improve staff training, and adjust risk management settings.

9. Train Employees on Best Practices

• Ensure all staff are trained to recognize suspicious activity, follow payment acceptance protocols, and clearly explain business policies to customers.

10. Respond Promptly to Disputes

• Use the Square Disputes Dashboard to quickly respond to chargebacks, submitting all relevant documentation and evidence within the required timeframe.

By implementing these practices, you can significantly reduce the risk of chargebacks and strengthen your ability to successfully contest them if they occur when using Square.