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Running an online business in the UK comes with the territory of dealing with chargebacks and Section 75 claims. As a merchant, few things are more frustrating than seeing hard-earned revenue clawed back through disputes. Not only are chargebacks and claims costly in themselves, but they also dent buyer trust if not handled properly.

The good news is that with some strategic policies and procedures, UK online businesses can reduce their exposure to chargebacks and Section 75 claims. Doing so limits revenue losses and protects your reputation with customers. This article will break down exactly what chargebacks and Section 75 claims entail, as well as actionable tips for minimising disputes. Let’s dive in!

Breaking Down Chargebacks and Section 75 Disputes

When it comes to keeping disputes at a minimum, it pays to understand what a chargeback or Section 75 claim is all about. Let’s break it down in simple terms.

    Chargebacks give cardholders a way to reverse charges when something goes pear-shaped with a purchase. Maybe the goods never arrived or were faulty. Perhaps you got overcharged or signed up for a dodgy subscription unknowingly.

Whatever the case, you can ask your bank to snatch back the payment, no legal rights required. Chargebacks rely on card network rules, not the law itself. Most claims need to be filed within 120 days too. 

    Section 75 is a totally different beast, specifically aimed at UK credit card users. It stems from an actual consumer law giving you refund rights in certain situations with bigger purchases from £100 to £30,000. 

If a retailer doesn’t deliver goods or services as promised, you can make them share liability with the credit card company. The window is also significantly longer at 6 years after buying. So in a nutshell: 

  •     Chargebacks work for credit OR debit, Section 75 just credit
  •     Chargebacks use card policies, Section 75 uses consumer law
  •     For chargebacks the card provider handles it, for Section 75 they share liability
  •     Chargebacks have 120 days, Section 75 has 6 years

If you want to see a full breakdown of the differences, check out this resource from UKFinance. Now let’s look at minimising these pesky disputes.

Dodging Disputes With Fraud Prevention

Online businesses know how damaging fraud can be. But did you know solid fraud prevention tools and strategies can also help minimise costly chargebacks and Section 75 claims? 

Yep – putting strong safeguards in place reduces the risk of nefarious transactions slipping through the cracks. That means fewer unhappy customers down the road when compromised cards or accounts get involved. So what should you do to avoid fraudulent activity that can lead to disputes? Here are some tips: 

  •     Use fraud filtering and scanning tools to screen transactions for red flags. Anything suspicious gets blocked automatically.
  •     Monitor manually too and be on the lookout for weird patterns like many orders shipping to one address.
  •     Only ship to the billing address and match names on the order. Fraudsters tend to send purchases elsewhere.
  •     Stay educated on the latest fraud techniques cybercriminals use to stay a step ahead.

Solid prevention strategies like these minimise your fraud exposure – and reducing bogus charges means fewer reasons for real customers to file disputes later. That’s a win-win for avoiding chargeback and Section 75 headaches down the road.

Crystal Clear Product Descriptions

Want an easy way to avoid chargebacks and Section 75 claims? Beef up your product descriptions. When you give shoppers all the nitty gritty product details upfront, it minimises surprises when the goods show up at their door. No more disappointed expectations because of vague or missing info. 

Share the specs, materials, sizes, and even the flaws. Include high-resolution pictures and videos from all angles. The more exhaustive, the better. If this is something you are struggling with, describe it like you’re talking to your friend who’s never seen the item before. Leave nothing to the imagination, and paint the full picture! 

With crystal clear descriptions, customers can envision products more accurately before buying. When the real product arrives as expected, no disappointment occurs (and thus, no disputes).

Boosting Transparency to Lessen Disputes

In a similar vein to the last point, being upfront and transparent about policies, processes, and potential issues can go a long way in reducing customer disputes. Many chargebacks and Section 75 claims arise from buyers feeling misled or uninformed about key aspects of the transaction. 

Merchants should ensure full transparency by disclosing shipping times, return windows, refund terms, and other critical policies before the sale. This allows customers to make purchases with their eyes wide open. Send order confirmations and shipping notifications to keep buyers looped in. Make policies and terms easily accessible on the website as well.

Most importantly, handle issues openly and honestly when they occur. Communicate about delays or problems proactively. The more merchants hide behind convoluted policies as an excuse, the likelier disputes become. 

As such, striving for transparency and clarity in all customer communications minimises situations where shoppers feel deceived or caught off guard. When expectations are set accurately from the start, customers have little reason to file claims later on.

Know When to Make It Right with Refunds or Replacements

While merchants should aim to reduce invalid disputes, it also pays to promptly issue refunds or replacements when claims are legitimate. If a customer has clearly received defective merchandise, incorrect items, or had major issues like never receiving their purchase, providing a refund or exchange can nip disputes in the bud. 

Even for grey area cases, merchants may want to consider goodwill replacements or credits to maintain positive buyer relationships. Within reason, eating small losses is smarter than jeopardising customer loyalty and reputation.

That said, merchants must be careful not to reflexively issue refunds for clearly illegitimate claims. Strictly adhering to disclosed policies and terms is important to avoid opening the floodgates to abuse. 

With experience, you will be able to develop an intuition for which cases warrant exceptions versus sticking to protocol. When in doubt, it can help to empathetically communicate with the customer before deciding. Remember, picking battles carefully and making fair calls on refunds and replacements based on case merits can optimise dispute prevention.

Final Word

At the end of the day, chargebacks and Section 75 claims are part and parcel of running an online business. But with some strategic policies and procedures, UK eCommerce merchants can minimise these costly disputes. Whether it be robust fraud prevention, transparent processes, clear communications, or fair refund practices, proactively addressing disputes and chargebacks will help you reduce exposure and keep hold of more of your hard-earned revenue.