You’ve got enough challenges and obstacles when it comes to fighting chargebacks. Don’t let these seven common mistakes make it even harder for you to resolve fraudulent chargeback claims.
Mistake 1: Not Fully Understanding Chargeback Reason Codes
To effectively fight chargebacks, you need to completely understand the chargeback reason codes. Not only does the chargeback reason code classify the type of chargeback and the reason why the customer is making the claim, it also defines the evidence you need to provide to fight and successfully win back the profits lost from the chargeback being represented. This is why understanding all facets of the chargeback reason code is mandatory to efficiently and effectively fight a claim. When you know the potential chargeback reason codes that you might see you’re better able to respond quickly and resolve (or win) the chargeback dispute case before you incur losses.
Mistake 2: Not Fighting The Chargeback Claim
While you likely do know that you shouldn’t fight every chargeback claim, it is important that you don’t simply ignore the claims. For every claim, it’s critical that your team completes a full analysis to determine when to represent a chargeback and when it is not financially wise to do so. When you fail to follow through and do not proceed with chargeback representment, you’re guaranteed to lose 100% of your profits. We want you to recover as much money as you can, this is why you need to do a careful and thorough review of each claim, before you decide how to proceed.
Mistake 3: Not Maintaining Customer Service Best Practices
Good customer service goes a very long way in limiting the number of chargeback claims you have to handle. When your customers feel confident that they can get the help and assistance they seek from your customer service team, they’re much less likely to dispute a charge with their issuing bank. As a merchant, you need to make sure that your customer contact information is clearly displayed on your website and on the checkout page. Additionally, make sure that your refund policies are easily available and accessible. This includes fully describing what the product or service you’re selling includes and involves, so that your customers fully understand the purchase. Keep in mind that even if a customer does make a chargeback claim, your customer service team can still contact this customer – this can often help alleviate the situation and encourage the customer to undo the chargeback directly with their issuing bank. Lastly, make sure not to neglect the 7 – 10 day period you have to dispute the chargeback claim.
Mistake 4: Wasting Your Efforts
Specifically, for recurring merchants, it’s important to understand which chargeback cases are being handled by the acquirer. Some disputes qualify for representment automatically and it is up to you, the merchant, to know which disputes fall into this automatic category. Automatic representment is likely possible with the following: fraud notification service (FNS – MasterCard), duplicate chargebacks (MasterCard and Visa), transaction already refunded (MasterCard and Visa), and out of time (MasterCard and Visa). Take the time to get fully up-to-speed with your acquirer’s standard practices and policies so you can be confident you’re not wasting your efforts or missing claims.
Mistake 5: Ignoring Red Flags
Each and every chargeback claim is an opportunity for you to learn and understand how and why these claims are occurring. Follow each claim from beginning to end, and look for any red flags and other indicators that can help you in the future. In particular, we want you to pay attention to these red flags:
- Reasons for chargebacks and disputes
- Common cardholders/issuing banks initiating chargebacks
- Percentage of chargebacks related to fraud
- Reasons for unsuccessful representment
- Win/loss rate
Knowing and understanding this information allows you to learn from your chargeback data and quickly identify problems and issues. You might find out that you need to improve your website content, provide more training to your customer service team, or provide more details about your refund policies. You have to do more than react – you have to learn and respond.
Mistake 6: Not Evaluating Success and Your TRUE Win Rate
Do you know how your win rate is calculated? It is important that you have detailed insight into your actual win/loss rate since there is typically high disparity on how these two critical numbers are calculated. Find out if the win rate is based on the first representment – this can often be misleading since the end result can still be a chargeback. So you need to know that the 90% win rate is actually 90%. A true win rate should be calculated by looking at the total disputes that were represented successfully (without second representment, prearbitration, or arbitration) divided by the total number of disputes (regardless if they are represented or not). We agree, this is not simple, contact us to find out how we can help you out.
Mistake 7: Increasing Costs and Draining Internal Resources
We both know that fighting chargebacks takes time, costs money, and requires expert knowledge. Ask yourself if you have the time, energy, and money to devote to fighting chargebacks. You need to be confident that the money and people you devote to this are being used effectively and that you are achieving success – if not, you’re wasting time and money. This is why so many merchants seek professional help and advice from a representment partner who does only this kind of work. This allows you to focus on what you do best while someone else is working for you behind-the-scenes to make sure your company is protected from and fighting chargeback claims.
Now we want you to learn more about these seven mistakes so you really can take measures to prevent them from occurring. Read 7 Mistakes Merchants Make When Fighting Chargebacks and then contact us to find out how we can help you. Make smart decisions today about how you will handle and fight chargebacks to ensure that your business remains a success.