It is inevitable that you will experience chargebacks at your restaurant at some point or another, which occur when a customer disputes a transaction on their account and the charge made at your restaurant is reversed and returned to the cardholder.
Chargebacks occur for a number of reasons, including when there has been card fraud or when a customer is charged the incorrect amount.
By making concerted efforts to avoid chargebacks at your restaurant, you can save your restaurant’s revenue.
Invest In A Secure POS System
Having a secure POS system and being PCI compliant to protect your customer’s data will go a long way in helping prevent chargebacks. When customers come to your restaurant and use their credit or debit card to pay, they expect their financial information to be secure.
If your restaurant experiences a data breach, it could make customers wary about coming back in the future.
Remember, as of 2015, when EMV chip technology became standard, the liability of fraud shifted from the card issuer to you, the merchant. Why?
EMV chips are much more secure than the traditional magstripe, as the chip generates a one-time code that is difficult to reproduce. If you failed to invest in a more secure terminal, you may be held liable fraudulent charges.
Thankfully, the burden does not fall solely on you. There are cases where the card issuer will be held liable, like if a stolen card is used online or the chip card was used at an EMV-compliant merchant.
By investing in a POS system like Micros, Toast, or MobileBytes, you are helping prevent fraud at your restaurant. These systems can integrate video surveillance while monitoring transaction data to curtail cases of fraud.
Engage In Excellent Customer Service
Though it’s very rare, some customers do claim chargebacks with their bank when expectations of the restaurant are not met, like if their meal was under- or overcooked or they were given the wrong order.
If you experience a dishonest customer who initiates chargeback to get a free meal, you can dispute the chargeback, though the process is lengthy and it is your responsibility to prove that the chargeback is fraudulent.
The sooner you dispute a chargeback the better, as you will not be encouraging the practice and save you money in the long run.
It is essential to remember that not every chargeback needs to be disputed. If it is a legitimate complaint, like being charged the wrong amount, admit the error and do what you can to fix it.
In doing so, you are helping establish trust with the customer by taking their complaint seriously.
Have a dedicated cloud POS system to help you maintain accurate records so you can dispute the chargeback, if needed.
Solve Problems Immediately
Set a schedule to go through your restaurant and find ways you can improve. Customer comment cards are an excellent way to identify potential problems and address them before they come back to in the form of chargebacks and poor reviews.
Set clear expectations for your guests in the form of well-defined menu descriptions, as well as staff that have been properly trained in customer service.