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Advice You - Avoiding Chargebacks For Your Online Store
chargeback, for the uninitiated, is a simple procedure by which someone calls his/her bank and requires a credit card transaction to be refunded. The bank is usually very flexible and refunds the transaction on the spot. This unusual generosity from the bank comes at the expense the merchant, who will no
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
t only lose the value of the original transaction, but will also be charged a fee for this chargeback. The aim of this article is to help online stores understand the reason of chargebacks, and how to avoid them.
Usually online transactions are more likely to be chargebacked than their offline peers. Th
Usually online transactions are more likely to be chargebacked than their offline peers. Th
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
re are many reasons for this, but the main reasons are the following:
1. Unsatisfied customer: Since the customer is not physically present to examine the product, he/she might feel misled in case the product received does not match his/her expectations. Delays in shipping can also lead to disgruntled c
1. Unsatisfied customer: Since the customer is not physically present to examine the product, he/she might feel misled in case the product received does not match his/her expectations. Delays in shipping can also lead to disgruntled c
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
stomers and might potentially lead to chargebacks.
2. Billing Problems: It is very easy to mistakenly double-charge customers over the Internet. Clicking the "Checkout" button twice on the majority of websites might lead to double-charging a customer. Slow websites or websites using slow payment gateway
2. Billing Problems: It is very easy to mistakenly double-charge customers over the Internet. Clicking the "Checkout" button twice on the majority of websites might lead to double-charging a customer. Slow websites or websites using slow payment gateway
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
can expect a lot of those double charges.
3. Customer forgetting about the transaction: Going to a shop and buying a product off the shelf is a memorable thing, as it involves dealing with other persons (usually sales people) and usually requires a fair share of the person's time. On the other hand, bu
3. Customer forgetting about the transaction: Going to a shop and buying a product off the shelf is a memorable thing, as it involves dealing with other persons (usually sales people) and usually requires a fair share of the person's time. On the other hand, bu
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ying something off the Internet is not so memorable, as it is normally a fast process that does not involve dealing with others. Customers not recognizing transactions on their credit card statement tend to call their bank and chargeback on the spot.
4. Fraud: If you have been long enough in the online
4. Fraud: If you have been long enough in the online
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
usiness, then for sure you have experienced some fraudulent transactions on your system. The majority people notice that their credit card was stolen at a later stage, so what they do is that they call their bank, and they cancel all fraudulent transactions. Unfortunately, almost all of these cancelled t
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ansactions, however, were processed on legal online stores, like yours.
5. Customer not feeling obliged to honor the transaction: Some customers usually do not feel being bound to honor online transactions the same way they honor the offline ones, as the traditional form of approval, which is the signat
5. Customer not feeling obliged to honor the transaction: Some customers usually do not feel being bound to honor online transactions the same way they honor the offline ones, as the traditional form of approval, which is the signat
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
re, is not required. Now even though such customers are rare, they do exist, and they do chargeback, especially if the transaction was for a service or a non-physical product.
Now that we know the main reasons of chargebacks, let us examine the ways to prevent them:
1. Have a smooth refund policy: In a
Now that we know the main reasons of chargebacks, let us examine the ways to prevent them:
1. Have a smooth refund policy: In a
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
normal store, if an unsatisfied customer walks in and complains, he/she is usually given a refund. This should be the case in an online store. Issuing a refund not only makes your disgruntled customers satisfied, but it'll also make them trust you, and thus willing to make more transactions with you and
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
forget about this one bad experience. Keep in mind however, that your refunds should be swift; delays in refunds will make you lose your customers' trust forever, and will risk you being chargebacked after issuing the refund.
2. Avoid duplicate transactions: Most online companies, warn their shoppers ag
2. Avoid duplicate transactions: Most online companies, warn their shoppers ag
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
inst clicking the "Submit" button twice on their checkout page, at the risk of being double charged. This technique, in my opinion, not only makes the customer scared, but it'll also make the company look unprofessional. What you should do is to create a JavaScript that will disable the "Submit" or "Chec
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
out" button once clicked. Additionally, you should have a server side script to process only the first transaction in this case. You can easily know that a transaction is a duplicate one if it occurs at a very short interval from another transaction that is from the same client and for the same product(s
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
).
3. Include your phone number: You should ask your billing gateway to include your company's customer support number next to your transactions on your customer's credit card statement. In most cases, if the customer sees a transaction that he/she can't remember, then he/she will look for a phone numbe
3. Include your phone number: You should ask your billing gateway to include your company's customer support number next to your transactions on your customer's credit card statement. In most cases, if the customer sees a transaction that he/she can't remember, then he/she will look for a phone numbe
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
to contact the company where the transaction in question was processed. If there is no phone number next to the transaction, then the customer will immediately call the bank to chargeback. Note however, that some customers can be patient, and can lookup your phone number on the Internet based on the nam
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
of your company.
4. Prevent fraud: First and foremost you should use CVV (Credit Verification Value) for credit card authentication. AVS (Address Verification System) will potentially reduce the number of legitimate transactions that you can have because the customer can easily make mistakes when typin
4. Prevent fraud: First and foremost you should use CVV (Credit Verification Value) for credit card authentication. AVS (Address Verification System) will potentially reduce the number of legitimate transactions that you can have because the customer can easily make mistakes when typin
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
his/her address. Additionally, AVS only works in the US. The best thing to do is to ask for the address but not validate against it. You should also check if the shipping address is the same as the address on the credit card, if it's not, then you should investigate the transactions. Finally, locate the
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
country where the transaction originated from, and if this country is different than the one on the credit card, then most likely it's a fraud.
5. Explain the legal obligation of an online transaction: You should, in your checkout page as well as in the order confirmation email, mention clearly that an
5. Explain the legal obligation of an online transaction: You should, in your checkout page as well as in the order confirmation email, mention clearly that an
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
online transaction has the same legal obligation as its offline peer, and it has to be honored.
Chargebacks are and will always remain a nuisance that will never go, and since challenging a chargeback is nearly always useless (as usually it costs more to recoup the money than the original's transaction
Chargebacks are and will always remain a nuisance that will never go, and since challenging a chargeback is nearly always useless (as usually it costs more to recoup the money than the original's transaction
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
alue), you should start thinking about implementing the above techniques to avoid your transactions from being chargebacked in the first place. Failing to do that may risk getting your business blacklisted and your merchant account suspended, as there is a limit on how many chargebacks you can have/month
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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