Reduce Fraud with Chargeback Management Software

Michael Mallon

Jan 13, 2021

Every business must deal with chargebacks, but online sellers are particularly vulnerable to fraudulent chargebacks initiated by their own customers. Malicious attempts by cardholders to get a refund while keeping the merchandise they purchased are difficult to prevent because they are perpetrated by legitimate cardholders.

This is not the same as friendly fraud, where buyers dispute credit card charges because they either don’t remember making the purchase, recognize the merchant information on their statement or are unaware that another authorized user made the purchase. However, friendly fraud can lead to fraudulent chargebacks – recent research shows that 40% of customers[1] who file a successful chargeback will file another within two months after discovering how easy it is to get away with it.

Preventing Hostile Fraud Chargebacks

Accertify’s chargeback management software provides a suite of tools that merchants can use to combat chargebacks and recoup revenues. Sellers also have the option to partner with the company’s chargeback management services team to take advantage of their fraud monitoring and dispute resolution expertise.

As you can see, the reason chargebacks occur run the gambit from buyer remorse, to buyer confusion, to true hostile fraud. Because of this, it is important to partner with more than just a chargeback representment company but also a partner who understand how to identify and slow fraudster activity as well as identify those chargebacks where you the seller did everything correct and should be paid for services rendered by the buyer.

Preventing, recognizing, and differentiating between chargebacks and hostile fraud requires a comprehensive approach. Accertify attacks chargebacks from multiple angles which helps you prepare timely, appropriate responses and win more disputes:

Account Monitoring

Accertify’s solution uses artificial intelligence and machine learning to digitally monitor customers’ accounts. Our products identify customers who pose potential risks for making unjustified chargebacks by building profiles based on biometrics, online behaviors and other data. Accertify’s proprietary algorithms draw from its vast database to highlight user activities that are known precursors to chargeback filings. For instance, a sudden order for a big-ticket item made with seemingly little research may be categorized as odd behavior and potentially seen as a red flag.

3D Secure

3D Secure version 2 (3DS2) facilitates data sharing between merchants and card issuers and is primarily used to prevent hostile fraud by verifying a purchaser’s identity more accurately without asking for a password or risking purchase abandonment through a website redirect. This is completed in real-time to minimize checkout friction. If merchants use 3DS2 to authenticate credit cards with the issuing bank, chargeback liability shifts to that institution. This means the payment is guaranteed and the seller will not be burdened with fees or be obligated to spend hours gathering the evidence needed to win a chargeback dispute.

Data Analysis

Chargebacks are never fun to deal with, but they offer valuable information merchants can use to enhance their internal processes to improve customer service and fraud prevention. The experts who built Accertify’s chargeback management software have given clients the power to analyze chargeback trends and proactively make adjustments to minimize disputes. Whether you monitor chargebacks in-house or opt to work with our Chargeback Management Services team, we can deliver comprehensive chargeback management and fraud prevention by evaluating the reasons chargebacks have been filed, analyzing the likelihood they constitute hostile versus friendly fraud, and gauging the chance of winning a challenge. In the case of friendly fraud, data analysis can spotlight problems in product descriptions, return policies, data entry, and more. Remediating these shortcomings will reduce the number of chargebacks, which will save you time and preserve revenue.

Fighting Chargebacks

When you suspect a customer has initiated an invalid chargeback, our professional chargeback management software ensures you respond on time with the proper documentation to successfully challenge disputed charges:

Prioritization

Some chargebacks are legitimate, and others are not worth fighting for a myriad of reasons. Accertify’s robust chargeback management software decision engine automatically categorizes chargebacks by comparing them to your business rules as well as the details and results achieved in similar cases at our disposal in our database. Accertify’s chargeback management services clients receive personal attention from our experts. They work with you to determine the best strategy for challenging your chargebacks, reducing operational costs, and maximizing win rates.

Evidence Gathering

Accertify’s comprehensive chargeback management software includes an array of productivity tools and reporting capabilities.  It provides both APIs as well as an online portal to allow flexibility based on each merchant’s needs. It identifies required documents by reason code, card network, and merchant banking partners to ensure the best chance at success. These features help to eliminate delays in responding and potential errors inherent in more manual responses.

Representation:

You can depend on Accertify’s chargeback management services team to deliver responses on time, or you can use our software to send them yourself. Following these streamlined procedures can substantially ease the burden of challenging chargebacks while maximizing win rates and optimizing cash flow. Given the importance of effective chargeback management, it could be in your best interest to outsource the task to Accertify’s dedicated professionals to ensure all the details are covered.

Request a Consultation to learn how our chargeback management software and chargeback management services can help your company minimize disputes, improve win rates and reduce the amount of time and resources you currently invest in responding to disputes.