Five easy ways to reduce your dispute rate
I was recently helping a subscription business with their dispute rate. It was a solid business, but the dispute rate was high for the category.
After some poking around, we realized there were probably two main customer problems:
- "I don't recognize this charge"
- "I can't figure out how to cancel"
Here are some easy ways to fix these problems in one shot:
- Make sure your billing identifier is clear and includes your website & phone number. Bonus points if you make a landing page. Bad: "ORANGE" Good: "ORANGE.COM 800-555-1234" Better: "ORANGE.COM/BILL 800-555-1234"
- Make sure you send an automated email receipt when customers buy a subscription. The reply-to email should be your customer service email.
- Set up an auto-reply with expected response time on your customer service email, so customers know their ticket is being handled.
- Check your Spam folders to make sure customer emails aren't ending up ignored in Spam. Remember, if a customer feels ignored and can't cancel -> they will just dispute the charge instead.
- Before a Free Trial ends, send a pre-renewal reminder email to remind them what they're paying for and how to cancel.
Remember, a cancel is better than a dispute!
Too many disputes can become an existential risk to your business. If your credit card processor shuts you down, it's game over -> do not pass go, do not collect $200. Mind your disputes.