The recurring billing business model is one of the best innovations within the ecommerce industry.
Properly implemented, recurring billing
Yet, before implementing recurring payments or subscription billing models, be sure you have the basics in place to prevent chargebacks.
Widely known benefits of recurring billing include enhanced customer retention, easier collection of fees, and additional recurring revenue. An Inc.com article about recurring payments describes some other, less obvious, but truly essential advantages of this business model.
Businesses use subscription billing or recurring payment business models experience fast month-on-month growth. Recurring income protects you from the ups and downs of the marketplace. And you can use the tools specific to the business model in order to gain a better understanding of what your customers want.
It is necessary to fully understand your risk. Recurring and subscription billing has to be properly manged to mitigate risk.
Chargebacks can never 100% eliminated. Your goal is to prevent and control chargebacks as much as possible. Which protects your payment processing accounts. And helps your business grow.
There will always be customers that decide not to use a service after the recurring payment has already been processed. Or those who do not understand the payment process and were aware (or claim they were unaware) of the recurring nature of the transaction.
Naturally, good customer service goes a long way in preventing chargebacks. For instance, making it easy for customers to cancel.
Still, some customers never give you a chance to work with them. Instead, they simply call their card issuing bank and initiate a chargeback.
You'll never be completely clear of risk. All you can do is manage it the best you can.
Customers who are well informed are less likely to resort to chargebacks. Efficient communication can work wonders when it comes to preventing chargebacks for recurring payments.
Here's some quick tips that can be remarkably effective in preventing chargebacks.
Recurring payments and subscription billing business models are on an upward trend. As cloud computing, SaaS payments, online entertainment, and the digital world continue to soar, opportunities for recurring payments and subscription billing models are endless.
Offering superb customer service to your customers is one of the best ways to mitigate the risk of chargebacks. Top-notch customer service is your first line of defense in preventing chargebacks.
How are you protecting your business from recurring billing chargebacks?
Contact firstname.lastname@example.org today.