If the contacts are not staying in the contact housing, or if the battery will not supply a normal charge the battery may need to be replaced.
The contacts are loose in the connector housing to allow them to align with the mating connector if its contacts are out of alignment.
Are you referring to the Ni-Cad batteries? They are the only type that should be charged in the double charger. Do you have the battery properly seated in the cradle? The 7.2v batteries hit a switch in the cradle to tell the charger it is a 7.2v battery. The Inventors Guide Insert has pictures of how to insert the battery. The double blink pattern indicates there was a problem charging the battery. The most common issue is charging the 7.2v battery while not properly installed in the cradle. Batteries that will not accept a charge will also cause the double blink.
It is normal for a fully charged 7.2v battery to read 1 to 1.5 volts above the label.
Ni-Cad batteries should not be left on the charger for extended periods of time and should not be left on a turned on unit for extended periods of time. Rechargeable batteries have a limited life, especially when abused.