Steps Your Business Can Take to Maximize Profits and Protect Revenues
Running a small business takes a lot of work as most entrepreneurs know. Yes, in a sense you get to be your own boss, but in practice, your clients and customers are often in charge and you must respond to their needs. With dedication and effort, there’s a great chance that you’ll succeed in your ventures. That said, it’s crucial to understand the many pitfalls you could stumble into, such as chargebacks and high payment processing fees. You also need to be proactive when working to protect and increase profits. Let’s take a look at some ways a business owner can safeguard their revenues and thus their business.
Use Automation and AI When and Where Possible
Practically every company has felt the impact of the tight labor market in recent years. Finding employees can be difficult and salaries have been trending up. If you use AI and/or automate various business processes in part or whole, you could dramatically increase productivity and output while not having to hire additional staff. This can make life easier for you, your employees, and even your customers. If you’re not sure how automation can help your business specifically, you may want to find a technology consultant.
There might be aspects of your business that could be radically transformed with the right automation and AI tools. For example, AI is being used to detect fraud and ward off cybersecurity threats. This can help prevent data breaches, chargebacks, and more. Automation and AI will require a bit of time and other resources to set up, but the costs are often well worth it in the long run and could help you increase profits and protect your ventures. To this end it’s vital that merchants know the 101s of chargebacks.
Head Off and Fight Chargebacks
Chargebacks have become a major threat to businesses. These occur when a cardholder asks their bank to refund a purchase. Should the bank approve the chargeback, they’ll be able to claw back money from the merchant. In a sense, a chargeback is an unauthorized and difficult-to-block refund.
Fortunately, merchants can fight chargebacks with a variety of methods. First, it’s smart to examine your business to see if you can reduce chargebacks. Writing clear product descriptions, providing tracking information, and offering responsive customer service can often reduce the number of disputes you get into. By using fraud detection tools, you can shut down suspicious transactions and otherwise deter criminals.
You can also use advanced tools, like chargeback alerts, which warn merchants of a pending chargeback and give them time to resolve it before it’s filed. This is crucial because chargebacks carry hefty fees, ranging from $25 to $100 or more. These costs could quickly eat into your profits. If a chargeback is unavoidable, the right dispute management platforms like Chargeback Help will make it easier to track important dates, gather evidence, and otherwise dispute a chargeback.
Try to Lower Payment Processing Fees
Credit cards and debit cards are wonderful for cardholders. They’re often a good thing for merchants as well, but the processing fees do add up rather quickly. In some cases, you may be able to use a different solution, like direct bank-to-bank payments through the Automated Clearing House (ACH) network. You may have to pay some fees, but compared to credit cards, they’re often much lower. Saving a few percent here and a few percent there can quickly add up.
Also, make sure you pay attention to any fees charged by your Point-of-Sales (PoS) systems, online payment platforms, and everything else. It’s smart to shop around for acquiring banks, which are institutions that will accept payments on your behalf (in exchange for a fee). You may be able to find cheaper banks than the one you’re currently using.
Keep in mind that if a merchant is hit by a lot of chargebacks, they could be designated as high risk and banks may refuse to work with such a business or may demand higher fees to offset risks.
Take Fraud Prevention Seriously
Sadly, fraud has become a major issue for businesses big and small in recent years. While the World Wide Web has created tremendous benefits for human society as a whole, there are some downsides to the Internet. For example, it’s now much easier for cybercriminals to steal sensitive data because they can often gain access to it via the web.
Data breaches are a major concern, and according to Statista, the average breach will cost nearly $9.5 million in the United States. The bill for small companies may end up being less, but at the same time, small business owners don’t have access to the same resources as a large company.
Fraudulent activity can also result in chargebacks, which creates a double whammy for businesses. Not only could they suffer directly from a data breach, but if stolen credit card information is used to make purchases, a merchant may end up on the hook owing to chargebacks. This is true even if the merchant had nothing to do with the data breach.
As you can see, there’s a lot to consider when looking for ways to protect your revenues and maximize your profits. Steps like using chargeback alerts and implementing AI could save your business a lot of money in the long run.
This article has been published in accordance with Socialnomics’ disclosure policy.