How to Reduce Chargeback Volumes and Win More Claims
How do you reduce the impact of chargebacks? It’s an important question because as the first two blogs in this series have shown, chargebacks are growing rapidly in volume and originating from a wider spectrum of sources.
The result is that many merchants don’t fight at all. According to a Javelin survey[1], 64% of merchants feel that most chargebacks present little opportunity for recovery. But this is not sustainable as claim numbers increase. Chargebacks can be costly and time-consuming, but there are effective ways to reduce the administrative burden and increase your win rates.
In this blog, we’ll explore the latest ways to prevent chargebacks and minimize the damage they can cause.
Communicate and clarify for friendly fraud prevention
The good news here is that, in chargeback management and prevention, there is plenty of low-hanging fruit. Many chargebacks are the result of mistakes rather than malice. In a recent webinar poll, 34% of merchants surveyed think over half of their chargebacks are the result of customer confusion rather than criminality.
Consumers tell a similar story. 77% of them say they often cannot recognize transactions in their online statements.The name on the statement may not match the actual business name. Fearing fraud, many will contact their banks to dispute the charge.
In other words, this is a communication issue and a customer service challenge as much as a fraud prevention one. It is important for merchants to make sure the information that appears on card members statements is clear and easy to understand.
Jog memories to reduce chargebacks
There are tools that pull company logos into online statements alongside text descriptions and receipt information, making the origin of a charge obvious. Jogging memories is a simple way to reduce your chargeback burden instantly.
Pre-and post-delivery messages should contain detailed transaction information. They should also open a two-way communication channel with customers, giving them an easy way to report an undelivered item or a problem with the product. When legitimate customers have a straightforward way to talk to you, they’re less likely to initiate a chargeback with their bank.
And the more seamless and responsive your customer service channels are, the less likely ‘friendly fraud’ or first party misuse become.
3rd Party Fraud prevention
Of course, some chargebacks will still get through. And some are a result of fraudulent transactions and are valid. So how should merchants deal with these?
The short answer is with data. Even if the chargeback is a result of a fraudulent transaction getting through, there is still a great amount of overhead and operational cost involved in researching the dispute.
Merchants should leverage all the data at their disposal. That can now include device-level data, which might show whether a device was involved in making a purchase or subsequently went undetected through their processes. It can also provide insights into what can be improved in the future to prevent fraudulent transactions in the first place.
Distinguishing between customers and criminals
Simply knowing whether a chargeback has been instigated on the first or the fifth occasion a customer has purchased from you can inform your decision about responding to a chargeback. Data can also tell if certain products or services attract more chargebacks than others. Understanding patterns in fraudulent transactions and first party misuse can be incredibly valuable.
Tracking this data can help you understand your customers and distinguish between legitimate consumers vs cybercriminals. It can also help you tighten your fraud prevention processes at their weakest points.
Reducing your chargeback workload
Of course, you may be drowning in data already. Preventing chargebacks may seem a waste of time if it leads to surging administrative costs and low success rates.
That’s where automation comes in. Technology can now automate the representment process, helping to gather the compelling evidence necessary to win more claims while reducing your operational burden.
Automated chargeback management solutions can collect and aggregate the necessary data and submit it to the relevant internal and external parties.
Effective chargeback management solutions can create repeatable chargeback workflows, ensure the right compelling evidence is presented in the correct format, and integrate with other fraud prevention systems to help identify fraudulent chargebacks with a high degree of accuracy. They can do all this at scale.
Finally, automation can bring powerful analytics to your chargeback teams, helping you identify patterns and use targeted strategies to reduce volumes. And for those without a team to help manage these processes, fully outsourced chargeback management is an excellent option.
Accertify’s chargeback management solution offers all these benefits. It can help you track, manage, and resolve chargebacks quickly and efficiently with less human intervention, as well as identifying patterns in data that indicate fraud. Accertify uses data analytics and machine learning to reduce chargeback volumes and recover more revenue.
Merchants around the world must adapt to the changing chargeback regulations and policies. As new guidelines are released, it is increasingly difficult for merchants to decipher and manage their chargebacks without a trusted partner. Accertify Chargeback Management is proven to protect and support the leading global merchants, responding to over six million disputes annually (based on Accertify data from 2022).
For more information, please contact our team.
1 Source: Accertify, Merchants Chargebacks Fraud Survey 2021