What are some of the most popular chargeback myths that will keep me from boosting profits this holiday season?
Fighting chargebacks can be a time-consuming and resource-draining task for merchants. Compound that with the already-busy holiday season and merchants can find themselves underwater quickly, lacking the necessary resources and knowledge to protect payments. Debunking common misconceptions and addressing common problems in the dispute resolution process provides a good basis for merchants looking to implement a winning chargeback protection program and come out on top of the peak selling season.
Myth: Customer service and chargebacks are unrelated.
Reality: Having stellar customer service and being clear about return and refund policies can help you avoid chargebacks altogether and connect directly with customers to resolve disputes. As CardFellow points out, “A direct refund from a merchant to a customer is always less expensive than if a customer wins a chargeback.”
Myth: It’s impossible to win a Card Not Present (“CNP”) chargeback if you don’t have a signed receipt.
Reality: Compelling evidence can include a number of items other than a signed receipt, including photographs or e-mails proving a link between the person receiving the merchandise and the cardholder, or proving that the cardholder disputing the transaction is in possession of the merchandise.
Myth: You can’t fight PayPal disputes.
Reality: PayPal offers Seller Protection from chargebacks to merchants who meet the eligibility requirements based on Unauthorized Transactions or Item Not Received. The scope protects Sellers for the entire amount of payment and also waives the Chargeback Fee, if applicable.
Myth: Friendly fraud is almost impossible for CNP merchants to fight and requires concrete evidence that the cardholder participated in the transaction.
Reality: Visa changed the rules surrounding Reason Code 83 (Fraud – Card-Absent Environment), making it easier for merchants to represent and allowing them to provide “compelling evidence” proving the cardholder received goods or services, or participated in or benefited from the transaction.ISO&Agent offers insight into these changes, which impact a number of other reason codes as well.
Verifi released an e-book earlier this year called WHAT EVERY CARD NOT PRESENT MERCHANT SHOULD KNOW: Navigating Today’s Challenging Payments Ecosystem. Check out Chapter 3 on managing chargeback challenges and outlined specific myths and their realities. Think you can’t lower your chargeback ratio without reducing sales? Think again.
Merchants bear the burden of proof when fighting chargebacks and must show that the purchase was initially made in good faith by the cardholder. This takes significant time and resources as well as a thorough understanding of the complex and changing rules surrounding chargeback reason codes. By educating yourself and your staff on some of the common misconceptions surrounding chargebacks, you can improve your fraud management strategy in the wake of the holidays and ensure that chargebacks do not rob you of revenue this holiday season.
Verifi can help now and through the holidays with our award-winning chargeback protection program. Cardholder Dispute Resolution Network® and Chargeback Representment services. What are your thoughts? Ping us on twitter (@verifi) with #paymentstips and let us know what you think.