Ways to Reduce Chargebacks and Build a Healthy Supply Chain

Posted by Brooke Lester on Dec 16, 2020 2:49 PM

Ways to Reduce Chargebacks and Build a Healthy Supply Chain

Chargebacks are a costly and irritating part of doing business. You’ll see chargebacks when you don’t get a customer’s order correct, or you don’t uphold your end of an SLA. While they’re costly and irritating, chargebacks don’t have to be a necessary part of doing business.

Read on to learn how to reduce chargebacks with B2B integration solutions so you can have a healthy, sustainable supply chain.

Why Chargebacks Happen (and How They Disrupt the Supply Chain)

Before we can talk about how to avoid chargebacks, let’s take a look at how they happen in the first place, and how they’re a supply chain management disruption.

There are several reasons companies levy chargebacks:

  • The carton isn’t marked correctly
  • The shipment wasn’t packed according to specification
  • The shipment was late
  • The order was incorrect
  • The business didn’t send the right EDI transactions

The causes of chargebacks mean that the supply chain isn’t running as smoothly and efficiently as it could. When a customer has to spend extra time dealing with an order that didn’t meet specifications, that costs them money. To compensate for their losses, they impose chargebacks.

Ways to Reduce Chargebacks and Build a Healthy Supply Chain

How Can You Reduce Chargebacks?

There are three ways to reduce chargebacks:

  • Understand why the problem is taking place
  • Shift to a mindset of compliance
  • Put the right technology in place

Understand Why the Problem Is Taking Place

The first step to reducing chargebacks and improving your supply chain management is by understanding why chargebacks are being levied in the first place. Are you sending out packages that don’t meet customer specifications? Are you not getting the order right? 

Auditing your order fulfillment process is a crucial first step. It gives you insight into what’s going wrong, and how you can fix it.

Shifting to a Mindset of Compliance

The next step is to move toward a mindset of compliance. Everyone who’s involved in order fulfillment has to be concerned not just with filling the order, but also with filling the order according to specifications.

Creating a corporate compliance mindset isn’t something that happens overnight, and it definitely isn’t a set-it-and-forget-it sort of project. It requires ongoing education and measuring benchmarks in order to ensure that everyone understands the importance of compliance.

Putting the Right Technology in Place

Putting the right technology in place goes a long way to reducing chargebacks. B2B integration reduces chargebacks by automating processes, so orders are accurate.

B2B integration relies upon computers to share information electronically from systems of records. That means that there’s no more manual data entry (which is usually rife with errors). When a customer submits a purchase order, your B2B integration software reads it and submits a request in the order processing system. When no one has to input a form, it significantly decreases the risk that the order won’t go through correctly.

“B2B integration increases the reliability and accuracy of customer orders.”

Chargebacks are an expensive supply chain management issue. The right technology goes a long way to bring them under control and enhance your supply chain’s health. Integrate. Then Dominate.