How to prevent and win delayed shipping chargebacks

Delayed shipping is one of the major causes of chargebacks for merchants that sell physical goods.
Chargeback fees and how to avoid them legally

Online shoppers expect seamless and hassle-free transactions. They expect merchants to deliver orders on time and in good condition and want to be in the loop throughout the process.

Unfortunately, delays can and do occur. 

Such delays also lead to customer frustration and incidental chargebacks.

For those unfamiliar with the terminologies, a chargeback is a request from a customer to their bank or credit card company to reverse a transaction due to an actual (or perceived problem) with the purchase.

Delayed shipping chargebacks are a common issue for eCommerce businesses. And they can be costly and time-consuming to address. Research shows that the average merchant spends at least 17 hours monthly fighting chargebacks, and the average cost per chargeback will reach upwards of $191 this year. 

In this article, we’ll explore:

  • what delayed shipping chargebacks are, 
  • how to prevent them, 
  • and what to do if you receive one.

Let’s dig in!

What are delayed shipping chargebacks?

A delayed shipping chargeback is when a customer files a chargeback with their bank or credit card company because their order arrived later than expected or hadn’t arrived yet. 

Delayed shipping chargebacks result from a variety of factors, such as:

  1. Poor communication. Customers may not understand why their order is taking longer than expected. 
  2. Undelivered or lost packages. The customer may seek remediation by filing a chargeback if an order goes missing or is undelivered.
  3. Incorrect tracking information. If the tracking information the customer received is wrong or not updated, they may think someone stole their order. Or that it’s taking too long to arrive.

Generally speaking, customers file a chargeback if they don’t receive their order within a reasonable timeframe or if they feel you didn’t adequately inform them about the status of their order. 

Understanding how to prevent such expectation gaps is crucial to avoiding delayed shipping chargebacks. 

Read also: Chargeback fees and how to avoid them legally

How to prevent and win delayed shipping chargebacks
How to prevent delayed shipping chargebacks

The rule of thumb for preventing delayed shipping chargebacks are:

  1. Ensure your customers receive their orders on time, and 
  2. Keep them informed throughout the process. 

Yet it’s not always that straightforward. Order fulfilment can be tricky if you don’t have a well-thought-out workflow. But don’t worry; we’ve figured out the best practices for the entire process. You can copy and paste the most feasible systems from the following tips and tricks:

#1: Set realistic shipping expectations.

The industry is getting super competitive, making it harder to capture consumers’ attention. So it can be tempting to make unrealistic offers to optimize conversations and keep a positive revenue score.

While it’s advisable always to push your team for faster order fulfilment, you should also note that one of the main reasons for delayed shipping chargebacks is when you don’t deliver on your paper promise. You can prevent such issues with transparent and feasible delivery dates. Ideally, delivery timelines should be accessible on your website and in confirmation emails.

And if you can’t meet expectations due to unforeseen circumstances, like bad weather or peak season, communicate with your customers as soon as possible. Such proactive interventions will help prevent misunderstandings and inform them of any delays.

#2: Ship orders with tracking.

Tracking information is an essential tool for keeping your customers informed about the status of their orders. By providing them with a tracking number, they can see exactly where their package is and when it is expected to arrive.

Make sure to update the tracking information regularly, so your customers can see the most accurate information about their orders. You should also include the tracking number in your confirmation emails and make it easy for customers to access it on your website.

#3: Offer compensation for delays.

Consider offering compensation to your customers when you can’t deliver an order on time. Such excellent customer service makes the buyer feel cherished. 

It shows that you value your customers and are willing to redress any inconvenience caused by the delay. And you can be sure they’d ALWAYS talk to you before they contact their bank.

Compensation packages can be in the form of a discount or a gift. And ensure you have workflows for tracking issued and redeemed coupons.

#4: Have a clear return and refund policy.

8/10 consumers read your order return policy before purchase. And 72% of buyers say a simple return experience makes them more likely to shop from a vendor again in the future. A clear return and refund policy can help prevent delayed shipping chargebacks. 

Clearly outline your policy on your website, including any time limits for returns, how to request a refund, and what constitutes a sales final.

A transparent policy helps you prevent misunderstandings and help your customers know their options if they are unsatisfied with their orders.

 #5: Work with a reliable shipping carrier

All the recommendations above will mean nothing if you don’t choose a shipping agency that understands the peculiarities of the business inside out. For example, some of our partner merchants use Sendcloud to effortlessly automate your shipping workflow while offering customers an unmatched delivery experience. 

With simple integration to 80+ carriers using their API or 50+ integrations, you can effectively plug all the gaps that cause delayed shipping chargebacks without incurring more costs. ​​In terms of tracking and tracing, you can turn on automatic, branded tracking messages to keep your customers in the loop with minimal effort. Plus, redirect them back to your brand with a customizable tracking page.

How to win a delayed shipping chargeback

Chargeback remediation is one of the most tedious endeavours for an eCommerce business owner. The first reason is that chargebacks, by their very nature, are customer-centric, making merchants guilty by default whenever a cardholder files a case.

Secondly, fighting chargebacks requires specialized knowledge that many merchants don’t possess. Hence their chances of success stay at only a meagre 12%.

The following tips will help swing things in your favour.

  1. Gather compelling evidence

To win a delayed shipping chargeback, you must prove that you delivered the order on time. Evidence for this purpose includes a copy of the tracking information, proof of order delivery, or a signed receipt. 

Be sure to compile only relevant documentation and follow established compelling evidence best practices by adding all PDF files into a single file and all image files into one file.

2. Respond to the chargeback promptly

Responding to chargebacks beyond the acceptable response time limit means total loss by default. Card issuers like Visa require vendors to respond to chargebacks within 30 days. Mastercard’s chargeback “time limit” is 45 days for each chargeback phase, while AmEx gives only 20 days per case phase. 

The challenge is that you might not receive the chargeback notice immediately after the customer filed the case, meaning your clock started running before you could take action. Ensure you respond to the chargeback as soon as possible, as you typically only have a few days to submit your evidence.

3. Craft a compelling chargeback response letter

Your rebuttal letter is your chance to set the records straight. It’s your weapon for revenue recovery. Explain the circumstances surrounding the delay in shipping in your response. 

If the delay was due to issues with the shipping carrier, weather delays, or other unforeseen circumstances, state it. And underline the steps you’ve taken to make things right with the customer.

4. Follow through

You might win the case in some instances, but the customer’s bank will initiate a new chargeback with fresh evidence. If that becomes the case, you can appeal the outcome. While you aim to avoid such lengthy protocols, you must be ready to follow through with the case if an appeal is necessary. 

Chargeback disputes can be complex, and the outcome is not always guaranteed. But an automated chargeback solution will save you the headache of the uphill battle.

5. Use chargeback automation to pre-empt losses

An automated chargeback recovery service like Chargeflow makes responding to chargeback and providing the necessary evidence to win the dispute seamless. Pulling order insight from over fifty data points, you can recover chargebacks without lifting a finger. Chargeflow also helps you optimize your business process with revenue projection tools, unlocking your team’s working capital. You can focus on building your business and serving your customers without worrying about losing your processing rights due to excessive chargebacks.

By taking proactive steps to prevent chargebacks, such as providing accurate tracking information and excellent customer service, you can reduce the chances of receiving a chargeback in the first place. 

And with chargeback automation, you won’t be found wanting when online shoplifters use delayed shipping chargebacks to game the system.

This article was contributed by Tom-Chris Emewulu, Chargeflow’s Digital Evangelist. With 7+ years of digital marketing experience, he crafts compelling, data-driven SEO articles that put brands on page 1 of Google search. Forbes, DW, Business Insider, Businessss2Community, and many other publications have featured his works. You can find him on Social Media via @tomchrisemewulu.

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!

Register for Technext Coinference 2023, the Largest blockchain and DeFi Gathering in Africa.

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!