How to Prep for Post-Holiday Chargebacks

How to Prep for Post-Holiday Chargebacks

Michael Mallon

Jan 13, 2021

Black Friday, Cyber Monday, and the weeks leading up to the holidays were likely to be your busiest and most critical revenue-generating periods.

Unfortunately, the weeks after can be among the most challenging, as chargebacks begin to take away from your hard-won holiday sales. Not to mention, all the preparation that goes into preparing for the end-of-the-year shopping period—advertising, stocking up on inventory, hiring temporary staff – leaves little time to deal with chargebacks.

Chargebacks, with their fees, investigative costs and potential damage to your merchant account, can cost significantly more than returns. Now is the perfect time to prepare and take steps to mitigate the negative effects chargebacks can exert on your bottom line. There are many types of chargebacks and you need a comprehensive strategy to deal with all of them.

Holiday Chargebacks Instead of Refunds

Defective or substandard products, incorrect product descriptions and delivery delays drive customers to file chargebacks instead of contacting you to get their money back. Prior to the holidays is a good time to review your return policy and customer communication options to ensure dissatisfied customers can pursue refunds or replacements instead of chargebacks.

Inadvertent Friendly Chargebacks

Unclear merchant descriptors or transaction summaries on credit card statements make it difficult for customers to recognize purchases they have made. Customers make many purchases during the last two months of the year, making it more difficult to remember what they bought, where and when. Providing clear descriptions, along with a web address or customer service number can jog their memories so they do not call their card companies to initiate a chargeback.

As time consuming as chargebacks are, they are to be expected, especially during the months following holiday shopping sprees. In fact, a 2017 article shows one shipper estimated holiday shoppers can likely return about 15%[1] of the goods they buy online, a large percentage will turn to chargebacks and a good many of those disputes will be fraudulent. Bad actors take advantage of online merchants who typically do not have the time to devote to research purchases and respond to chargeback claims, which can lead to a spike in the number of disputes, especially during busy periods. In fact, Accertify data shows merchants can see up to 40% more disputes in January, compared to other months[2].

The type of fraud many of us think of today is perpetrated by faceless criminals who use compromised cards or hack into accounts to make unauthorized purchases. Other cases involve legitimate account holders who commit online shoplifting by making purchases with the intention of disputing them so they can receive a chargeback and keep the merchandise.

Accertify offers chargeback management software, managed services and an array of online tools that monitor online accounts for suspicious activity, manage multi-factor identification, and compare users’ online behaviors to those of real account holders.

Sometimes, because of resourcing constraints, you cannot fight all instances of suspected buyer-remorse-induced chargebacks – when a buyer regrets his or her purchase immediately after the purchase. But the more winnable claims you run through the dispute process, the more revenue you can preserve. See below for tips on how to reduce post-holiday chargebacks:

Pick Your Battles

Focus on high-value cases and high-probability wins. Cases that are lost causes or involve little money will not deliver a positive return on investment. Spend your time and resources gathering strong evidence for chargebacks that you can prove and win.

Learn the Rules

Before the holiday rush begins, spend some time brushing up on chargeback processes, response deadlines, and other requirements for challenging chargebacks for each banking partner that you work with. Each has a set of expected defense materials you should provide when trying to justify chargebacks.

Study History

Review previous years’ chargebacks and outcomes. Qualify the type and quantify the amount of evidence you have presented in past cases that you have won and lost. Determine if customers target a few specific products for chargeback abuse. If an excessive number of holiday chargebacks come from products shipped to a single zip code, you can flag those addresses and investigate further before completing an order or shipping merchandise.


And lastly create a staffing plan based on historical chargeback volumes when compared to your current sales forecast.  Advanced planning can ensure you get to most, if not all, of the chargebacks.  For example, if through the fall you are responding to chargebacks a few days before they are due, think about offering overtime.  If you can get your team to be reviewing chargebacks as received, it would provide a larger buffer between receipt and required response timeframes ensuring you miss less chargebacks when the holiday hangover happens.

Chargeback rules can be complicated and responding to them can take up valuable time and resources. This is why partnering with a chargeback management company is the correct decision for many companies. A vendor can leverage established infrastructure, institutional knowledge, and powerful analytics to bring your holiday chargebacks under control. For example, Accertify’s Chargeback Strategic Risk Services team reviews every chargeback you receive, decides which should be challenged and helps gather the supporting documentation needed. Our team will also consult with you to improve operations and enhance performance to help minimize chargeback volume, maintain card brand response expectations, and report regularly on your chargeback trends.

Request a consultation to learn how Accertify’s comprehensive fraud-detection and chargeback management products and services can help you minimize your holiday chargebacks and make your end-of-year sales more festive.