1. Screen your payment gateway for fraudulent transactions. If you can avoid all fraudulent transactions, then you can avoid all of the chargebacks that follow. Look for signs such as the same card being used for multiple small orders over a short period of time and/or unusually large orders.
2. Send email confirmations to your customers immediately after each purchase. Having an email confirmation will help you fight and prevent chargebacks because the customer did not dispute the order at the time of the transaction.
3. Always ship your orders on time. Along with sending the order out in a timely manner, you should also clearly state within your shipping policy when your customer should receive their package. If you are an international merchant, take into account the packages that have to go through customs.
4. Require your customers to sign for their packages. Many “friendly fraud” chargebacks occur when a customer claims they never received their package. If you require your customers to sign for their package, then you have the proof you sent the order as promised.
5. Customize your billing descriptor. With a customized billing descriptor, you can easily prevent chargebacks since customers will recognize your business, and ultimately their purchase.
6. Require your customers to email a photocopy of their credit card, driver’s license or photo ID, and signature authorizing the purchase. This will benefit you if you ever have to fight a chargeback because the customer clearly authorized the transaction.
As you can see, chargeback prevention is a necessity for good e-commerce business practices. The above techniques will assist you in preventing chargebacks, however, nothing is ever fail proof.