Tips to reduce e-commerce chargebacks with Thai Payments

In Thailand e-commerce marketplace, reducing chargeback rate (Reject/Chargeback) requires a combination of local payment habits, risk control strategies and customer communication. Here are some key tips:

1. Selection of payment methods suitable for Thai consumers

  • Localised payments: Priority access to payment methods commonly used by Thais (e.g. PromptPay, TrueMoney Wallet, Rabbit Line Pay) to reduce misuse due to unfamiliarity with international credit card payments.
  • Cash on Delivery (COD) optimisation::
    • COD is the dominant method in Thailand, but the risk of backorders is high. Recommendation:
      • Pre-authorisation verification (confirmation of order authenticity via SMS/OTP at the time of placing the order).
      • Work with reliable logistics and ask for photo ID or OTP verification when signing for the goods.

2. Enhanced transaction verification and risk control

  • 3D Secure Certification: Mandatory use of 3DS 2.0 for credit card transactions to increase bank-side validation and reduce the likelihood of disputes.
  • Address Matching System (AVS): Check that the billing address matches the bank's records, especially for international card transactions.
  • Intelligent Risk Control Tools::
    • Flag high-risk behaviours (e.g. large orders for new accounts, short attempts with multiple cards).
    • IP location comparison (e.g. the order IP is from abroad but the delivery address is in Thailand).

3. Enhancing order transparency

  • Detailed Product Information: Provide product description in Thai + HD pictures/videos to avoid return due to misunderstanding.
  • Real-time order tracking: Integrate Thai Post or Kerry Express logistic tracking link for proactive push SMS notifications.

4. Optimising customer service and dispute handling

  • Thai Customer Service Support: Provides instant response from Line Official or Facebook Messenger (English communication may increase misunderstanding).

5. Flexible return and refund policy

  • Clarification of Return Terms (Thai version): Clearly labelled return and exchange rules on the checkout page to avoid disputes due to language barriers.
    • For example, "สินค้าสามารถคืนได้ภายใน 7 วัน หากไม่มีการใช้งาน" (unused merchandise can be returned within 7 days).
  • Partial refund option available: For small issues (e.g. minor defects), prioritise negotiation of partial refunds rather than full chargebacks to reduce the rate of disputes.

6. Prevention of "Friendly Fraud"

  • Order Confirmation Process: Send an order summary (with product pictures and prices) via SMS or Line before shipping, and ask for a second confirmation from the customer.
  • Maintaining the chain of evidence: Keep logistic signature vouchers and customer communication records for submitting bank complaints in case of disputes.

7. Localisation marketing and user education

  • Payment Page Tips: A reminder in Thai to consumers to "make sure your card details are correct" or "use the card only for yourself".
  • Frequently Asked Questions Video Guide: Create short videos explaining the payment steps and return process to reduce misuse.

8. Data analysis and improvement strategies

  1. Periodic review of the classification of reasons for denials:
    • Identify high-frequency issues (e.g. "product not received", "description does not match") and optimise supply chain or page information.
  2. A/B testing of different payment processes.
    • For example, compare "Mandatory Account Registration" vs "Visitor Payment" and choose the option with the lower chargeback rate.

Special Considerations for the Thai Market

  • 🚫 Avoid processing large transactions during late night/early morning hours (easily triggers bank risk control).
  • 📞 Provide Thailand local customer service number (+66) to enhance trust.

Through the above measures, we can systematically reduce the chargeback rate in the Thai market, and at the same time improve customer satisfaction. (Specific implementation details are needed for further discussion!)