Cannabis Industry Chargeback Prevention

Is your cannabis business losing revenue due to disputes and chargebacks? You’re not alone. At CB-Alert, we frequently work with cannabis companies to reduce their supply chain chargebacks.

Over time, we’ve seen many cannabis companies struggle with chargebacks, and we’ve developed groundbreaking methods to prevent them before they happen.

If you’re ready to eliminate cannabis industry chargebacks, CB-Alert is here to help.

Key Takeaways:

• Chargebacks can severely impact cannabis businesses.
• Cannabis chargebacks are often costly and high in volume.
• CB-Alert specializes in handling high-volume chargebacks for the cannabis industry.

What Are Cannabis Industry Chargebacks?

Chargebacks in the cannabis sector occur when retailers or vendors impose penalties due to issues like late deliveries, inaccurate orders, or damaged products. These chargebacks can be expensive, cut into revenue, and harm relationships with business partners.

Why Do They Happen?

Cannabis industry chargebacks often occur due to errors in order fulfillment and delivery, such as late shipments, incorrect product quantities, damaged goods, or labeling mistakes. Chargebacks can also result from paperwork issues, such as inaccurate invoices or missing documentation. Meeting retailer requirements is key to avoiding these penalties.

At CB-Alert, we help cannabis businesses identify the root causes of chargebacks and prevent future occurrences. We also offer real-time prevention alerts to all our clients.

Why Are They Costly?

Chargebacks are costly for cannabis companies because the financial penalties from non-compliance and errors in order processing can quickly accumulate. They also risk damaging relationships with retailers, potentially leading to lost business opportunities.

Disputing chargebacks and fixing errors requires time and resources, adding to the overall cost.

Cannabis Chargeback Prevention Strategies:

• Use fraud prevention tools: Implement 3DS2 authentication, RDR, and chargeback alerts.
• Accurate product descriptions: Ensure product descriptions match retailer expectations.
• Partner with CB-Alert: We help cannabis businesses prevent fraud before it escalates into disputes.
• Clear communication: Make sure customers understand their purchase, including pricing and fees.
• Customer service: Quickly address customer concerns to prevent dissatisfaction.
• Refunds: Offering refunds when appropriate can reduce chargebacks and foster customer loyalty.
• Clear billing descriptors: Ensure billing information is clear to avoid confusion.
• Maintain records: Keep detailed transaction and communication records.
• Monitor chargebacks: Use alert systems to catch and resolve chargebacks early.

How Chargebacks Affect Cannabis Compliance

In the cannabis industry, compliance is critical. Chargebacks can complicate adherence to strict regulations, as disputes often involve product accuracy, delivery timelines, and proper labeling.

Failure to meet these standards not only results in financial penalties but also puts your business at risk of regulatory violations. Frequent chargebacks can attract unwanted scrutiny from regulatory agencies, leading to potential fines or business disruptions.

At CB-Alert, we understand the unique challenges of maintaining compliance in the cannabis industry, and our prevention strategies are designed to ensure your business stays on track while reducing costly chargebacks.

How To Calculate Chargebacks

To calculate chargebacks, start by summing all chargeback transactions for a specific period, such as monthly or quarterly. For instance, if you had five chargebacks totaling $2,500, the total chargeback amount is $2,500.

Next, calculate the chargeback ratio by dividing the number of chargebacks by the total number of transactions in the same period. If there were five chargebacks out of 1,000 transactions, the ratio would be 0.5%.

Finally, multiply the chargeback ratio by 100 to get the percentage and account for additional costs like penalties, administrative fees, and lost revenue. This gives a clearer picture of chargeback impact.

Why Choose CB-Alert?

Chargebacks can be especially challenging for cannabis companies, where distinguishing between fraudulent claims and legitimate issues can be difficult. With over a decade of experience in high-risk industries, CB-Alert is here to protect your business. Here’s what we offer:

• Real-time alerts via Ethoca and Verifi
• 24/7 customer support available whenever you need assistance
• Transparent pricing with no hidden fees
• RDR services: Representment, Dispute, and Resolution
• System flexibility: Compatible with multiple gateways and CRMs

CB-Alert is your partner in tackling chargebacks, ensuring your cannabis business thrives.