You know that chargebacks are expensive. You know that you can’t ignore the costs associated with chargebacks. You know that chargebacks need to be managed by an experienced team. You know that chargebacks don’t need to be a headache for your business.
But how do you get to the point where chargebacks aren’t a headache and a stressor? You get there with knowledge. In order to take control of the chargeback process for your business, you need to understand why the process is broken and why it has become expensive and time-consuming. Once you know this, you’ll be better prepared (and motivated) to take action and make sure your business is not left on the sidelines.
To get you to a point of understanding and actionable knowledge, we’ve written an ebook titled: What Every Card-Not-Present Merchant Should Know. This detailed ebook covers the problems associated with chargebacks, the pain caused by these problems, and the solutions to these problems.
Essentially, the problems with the chargeback process come down to one core business fundamental: communication.
- Cardholder confusion: The cardholder doesn’t understand the charge or that they can contact you directly for assistance if they’re unsure about a charge on their card. Because they believe the charge is invalid and don’t know how to easily contact you, they bypass you and go directly to the issuing bank.
- Issuer lacks knowledge: The issuer doesn’t have the full details on the customer’s transaction records and is not able to legitimise fraudulent transactions.
- Merchant loss: By the time you find out about the chargeback claim, it is typically too late in the process to contact the customer to resolve the situation, and you’ve already incurred more costs than you should have.
When cardholders bypass the merchant and directly work with the bank, you miss the opportunity to resolve the dispute directly. This broken process causes friction, stress, confusion, and ultimately additional costs for you.
We look at these pain points in greater detail in What Every Card-Not-Present Merchant Should Know, so we urge you to download and read Chapters 2 and 3 specifically to learn more about the problem and pain. But for now, here’s an overview of these pain points that we hope will encourage you to take action.
When the cardholder decides to call the bank to dispute the charge—rather than contacting your customer service team—you get caught in the broken chargeback process.
- You don’t have the opportunity to resolve the dispute quickly with a refund or replacement, or to legitimise or validate the transaction.
- This results in increased chargeback volume, more disputes, increased instances of friendly fraud, and increased risk to your processing privileges.
- You’re forced to chase the dispute—and often it’s too late in the process to do so effectively.
- You lose the chance to save legitimate sales and keep your customers happy (impacting your brand and status). Savvy fraudsters learn that they have a higher degree of success when contacting the bank and bypassing you, because the bank doesn’t have the necessary information.
- You find out too late about the charge.
- This results in frustration and confusion. You have now lost money, are at risk of increased fees from the issuing bank, and may have to deal with unhappy customers.
You learn the hard way that chargebacks are a big costly pain and problem for your business. So, what do you do? You don’t have the resources, time, money, or expertise to devote to chargeback management. But you can’t ignore the problem.
Verifi is the recognised leader in the payments solutions industry. We have the tools, the technology, the experience, the foresight, and the desire to help you.
- Pre-Chargeback: Take advantage of Order Insight and our Cardholder Dispute Resolution Network (CDRN) to provide you with a solution to the broken communication issues. Resolve billing issues, gain vital knowledge about your customers, and be the first point of contact with your customers.
- The Chargeback: With Verifi’s comprehensive suite of chargeback management and prevention solutions, you will not have to worry about chargebacks negatively impacting your bottom line. With the communication gap closed between merchants and issuers, the cost of handling chargebacks can be erased.
- Post-Chargeback: With our Chargeback Revenue RecoveryService, you can recover this lost money. You’ll gain deep insight into which transactions should be represented and which should not, and how to get the best win rates to reclaim your profits.
Admittedly this is a very high-level view of the chargeback problem and the inherent broken process. We can’t cover all the details here, and that’s why we urge you to download and read our free ebook.
Get the answers to your questions and gain the knowledge you need to take real action that will make a difference for your company. The Verifi team is on your side and we want to help you solve the chargeback problem.