The Role of Order Documentation for Reducing Restaurant Chargebacks

Chargeback prevention should be a top priority for restaurants in the 21st century. Customers are living an increasingly cashless lifestyle, relying on debit and credit cards to pay for everything. Even when placing orders online through an app for delivery, most of your customers will use cards.

While cards and digital payments offer loads of convenience, they also open the floodgates for chargebacks and friendly fraud. Chargebacks cost restaurants substantial money. It's a growing source of revenue loss that threatens your bottom line and your business!

There are many ways to avoid the chargeback process. However, accurate order documentation is one of the most effective ways to combat both real retrieval requests and chargeback fraud.

Keep reading to learn valuable tips and best practices to safeguard your restaurant business.

Why is it Important?

Chargebacks are more than a minor inconvenience. While a few transaction disputes aren't a major concern, a higher number of chargebacks will cost your business. Not only are you losing time, money and resources in fulfilling orders you refund, but you also incur fees from merchant service providers. Estimates say that chargebacks cost businesses over $3.00 per dollar refunded due to the chargeback process!

Chargeback policies vary by card-issuing bank and merchant service providers, but they always come with chargeback fees to merchants like you! Most financial institutions typically launch an investigation after a customer submits a retrieval request to learn more about a disputed transaction.

That's your opportunity to fight customer disputes and safeguard your business. The problem is that most restaurants lack the means to provide strong evidence against customer claims. You need to change that to prevent chargebacks!

Accurate order documentation can help you fight disputed transactions and reduce the likelihood of a payment dispute from occurring at all. The right systems and refund policies can save you substantial time and headaches while reducing financial losses.

Avoiding Errors in Item Descriptions and Quantities

Customers may dispute a transaction for your restaurant for several reasons. While fraud does exist, many issues that trigger the chargeback process come from legitimate charges. Issuing banks can question legitimate purchases if the cardholder claims that they didn't receive what your restaurant advertised. Therefore, errors increase your risk of chargebacks.

The best way to avoid this issue is to prevent errors in your menu. Review the description for every menu item to ensure accuracy. Pay close attention to quantities and additional fees that might occur due to changes in the standard menu. Avoid confusion and make your menu crystal-clear. Doing so will help customers avoid ordering mistakes and give you all you need to show card-issuing banks or a credit card company that the customer made a legitimate purchase.

clarity in Special Requests

Special requests can cause problems because they go beyond standard menu items. If your customers request changes, ensure they know about additional fees. It's also a good idea to touch base for clarity.

If there's anything your team is unclear about, have them communicate with the customer and get everything in writing. Document that process so there are no questions about special requests, menu modifications and changes.

Establishing Clear Channels for Order Confirmation

Another reason why customers might dispute a transaction is because they didn't authorize it. Unfortunately, fraud runs rampant, and fraudsters can steal card information to order food. It happens more than most realize, and most customers won't know it until they see their credit card statement.

One way to prevent chargebacks in these instances is to establish clear communication channels for order confirmations. You should go beyond your app or website and send confirmation messages elsewhere. For example, you send confirmation emails and texts. If a customer receives one of them and doesn't recognize the order, they can cancel it immediately before you charge their card.

You can also employ address verification services to ensure orders don't go to the wrong house. Taking extra steps to verify contact information can make a difference, too.

Real-Time Updates on Delivery Status

Many chargebacks occur due to slow and inefficient delivery processes. Your restaurant may partner with third-party delivery apps with drivers you don't employ. That extra layer of complexity creates many unknowns while putting many things out of your hands.

When delivery goes wrong, your restaurant is the one to pay for mistakes through chargebacks. Implementing the right systems that allow customers to keep tabs on the delivery process makes a big difference. Your business can also monitor delivery status. Everyone stays informed, and the process is well-documented to make handling disputes much easier.

Implementing Robust Order-Tracking Systems

Order tracking from beginning to end can help prevent chargebacks, too. It's not just delivery that takes time and creates delays. Order preparation and processing issues can lead to excessive wait times and chargeback requests.

For example, communication problems between your restaurant and a third-party delivery app may cause you to receive an order much later than when a customer placed it. Having order tracking systems benefits you and your patrons.

Customers can see when you receive an order, when your cooks prepare it and when their meal heads out the door for delivery.

Minimizing Discrepancies and Disputes Through Transparency

A lack of transparency will hurt your business. If you don't communicate with your customers and have full transparency on everything from order details to delivery statuses, customers have more leeway when making transaction disputes. Your goal is to be so transparent that there's zero question about the legitimacy of a transaction.

You want to be able to point to documentation as evidence against a customer's claims. Transparency and consistency can also prevent chargebacks from happening at all. Minimize discrepancies wherever they occur and ensure that all information presented to customers is clear, easy to understand and identical across all ordering platforms. Ensure there's a clear understanding of what to expect.

The Impact of Accurate Documentation

Documentation can feel like a huge hassle. The restaurant industry is fast-paced, and you may think you don't have time to go that extra mile. But it's important to remember that competition is fresh on your heels, and every chargeback will cost your business while hurting your reputation.

Accurate order documentation can impact your business in many ways, making high chargeback rates a thing of the past.

Building Customer Trust and Satisfaction

While documentation will help you fight fraud and frivolous payment disputes, it will also benefit your customers. Diners want transparency and consistency. They want clear information about your menu, prices, cancellation policies, etc.

Clear and consistent documentation builds trust and makes delivering excellent customer service easier. When customers know what to expect, there's no question about quality or service. They understand what they're paying for from the jump. As a result, documentation can lead to better customer satisfaction.

Quick Dispute Resolution

No restaurant owner likes to deal with disputes. Establishments that receive many chargebacks may not even attempt to fight them because questioning the validity of the dispute and understanding the chargeback reason code requires too much time and effort. If you don't attempt to dispute the chargeback, customers only need a valid reason to get their refund.

But that's not the case when you have accurate order documentation. Documenting everything ensures you have all the compelling evidence you need to dispute a customer's claims. That means less wasted time and much faster dispute resolution.

Minimizing Unauthorized Transactions

Unfortunately, unauthorized transactions are common. Improving documentation in your restaurant and taking extra security measures to confirm orders makes all the difference.

Invest in systems to give your customers more channels for order confirmations. Doing so will provide patrons with peace of mind, reduce instances of fraud and make it easier to cancel orders before food goes out. Customers can catch fraudulent transactions or theft attempts before seeing their bank statements.

Strategies for Effective Order Documentation

Improving order documentation doesn't have to be complex. Many restaurateurs assume that taking extra steps to document everything will waste time and resources. However, it only takes a few simple changes and a great documentation strategy. Here are some best practices to follow.

Investing in User-Friendly POS Systems

Your point-of-sale (POS) system can be the source of discrepancies and errors. POS systems are the heart of order management. What your team puts into the system is what the kitchen staff prepares. Therefore, errors at the source lead to problems later.

Invest in a POS system that's easy for anyone to use. While all systems require training, well-designed software is intuitive and easier to figure out. Consider switching to a foolproof system your entire team can use, no matter how complex orders get.

Training Staff on Documentation Protocols

Another thing you can do is train your staff on proper documentation protocols. They should understand why your strategies are in place and their importance to your business. Stress that those protocols prevent revenue loss, and failing to follow them could result in issues that cost your business.

Then, spend time training your staff to do things right. From placing orders to handling special requests, they need to understand how to document everything to minimize errors.

Utilizing Technology for Real-Time Updates

Finally, consider investing in new technology! Modern tech can improve your business in ways you never thought imaginable. One of the most impressive is through real-time updates.

The best software will deliver status updates to customers, keeping them informed from the moment you receive their order. That alone will help prevent confusion and reduce chargebacks.

However, you can take things even further with real-time alerts. Software platforms can notify you of order errors and discrepancies as they happen, allowing you to take action and make corrections before meals go out to customers.

Get Started With Superorder Today

Order documentation makes all the difference in your fight against frequent chargebacks. You can employ many strategies for chargeback prevention, but accurate documentation benefits everyone. It can help you fight disputes, prevent confusion on your customer's end and create a more seamless experience between your restaurant, your customer and third-party delivery apps.

Let Superorder help you prevent chargebacks. Superorder is an all-in-one restaurant management system that combines many powerful features into a single easy-to-use platform. It has several great features to maximize operational efficiency and help your business grow, but the dispute management tools are second to none.

Take advantage of real-time updates, powerful documentation features, fraud prevention and more. Check out Superorder today to protect your business against chargebacks!