While they don’t happen often, payment disputes are a risk you take when accepting payment cards. Where there are purchases, there are payment disputes. As with any transaction, there’s always a risk that your customer will dispute the validity of their purchase. Cardholders can initiate a payment dispute or chargeback by asking their bank to reverse the charge. Follow a few best practices below to reduce the likelihood disputes.
Present Your Refund, Return, and Cancellation Policies on Your Receipts
Write out and present your return, refund, and cancellation policies on your receipts or any other agreements made at the point of sale. Presenting a no returns/refunds/cancellation sign at the point of sale is not sufficient to verify your business’s policies. Usually, you’re more likely to win a dispute if you can show that the customer signed a receipt or invoice in which these policies are clearly explained. Learn more about customising your receipts and invoices.
Make the Name on Your Customer’s Bank Statements Recognisable
Clarify your business name on your customer’s bank statements to ensure your business name reflects the type of goods or service you provide. If you don’t have a business name, include your service followed by the name of the city where you provide your service (eg. Florist - Melbourne, VIC). Do not use your personal name as your business name. Your customer may not recognise this name when it appears on their statement.
Communicate with Your Customers
Initiate and maintain open communication with your customers is one of the best ways to clear up confusion and reduce the likelihood of disputes. Clearly communicate your expectations around pricing, sales tax, delivery, shipping, and the services you provide. Check out our full suite of Customer Engagement tools to create better experiences for your customers.
Attach a Contract
One of the best ways to avoid misunderstandings or late payment is to put a contract in place. Contracts allow you and your customer to understand exactly what is expected from your transaction, minimise your chance of a dispute, and help ensure that you get paid.
You may also consider using one of our contract templates to develop your own set of terms. Using contracts can help to build good customer relationships and avoid disputes by setting expectations with your customer at the outset. Take a look at the contracts we have available in the Square Contracts feature.
If you need help attaching a contract or file to your Invoice or Appointment, our Support Center can help.
Note: Square is not a law firm, an attorney or a professional advisor in any industry. Square provides this template to individuals who choose to prepare their own contractual documents and does not constitute legal advice.