Protecting Merchant Patronage


There is no question that the internet has revolutionized commerce. Purchases happen in an instant with a few clicks, swipes, and taps – and a brand’s success can hinge on a merchant’s ability to deliver a smooth transaction process to their unforgiving consumers.
But meeting these expectations has had unintended consequences – a broken chargeback system that cost the industry $31 billion in 2017, $19 billion of which was absorbed by merchants. This presents a clear challenge to card-not present (CNP) merchants – establishing a loyal customer base within an ineffective chargeback system.
A single chargeback or instance of chargeback fraud might not seem like much. But the overall problem of chargebacks is never simple when you factor in the compounding impact it has on consumers, issuers, and merchants.
All it takes is one negative social media post about a stressful refund process, or multiple phone calls with the merchant to resolve an issue, to cast doubt about the brand and inspire additional negative comments.
Operating a viable CNP business model should have at core the aspiration to build brand loyalty through flawless execution. However, it’s critical that CNP merchants understand how tenuous the e-commerce marketplace is and take measures to support and foster the customer loyalty they intend to build.
The Slippery Slope of Customer Loyalty
Consumers can develop a strong connection with a brand, but it is a double-edge sword. When a transaction goes wrong, they are quick to hold the merchant responsible, regardless if the problem is a mischarge with the credit card issuing bank or the delivery service losing the package.
Recent Verifi-sponsored research reveals how this blame game hurts the primary merchant and similar merchants within the same niche or industry. In fraud disputes, 56% of customers hold the merchant responsible for the issues they experience.
Most telling from recent research is how the chargeback and transaction dispute process impacts customer loyalty. The longer and more exhaustive the dispute process, the more likely the customer is to abandon the merchant.

  • One call to resolve the dispute: 34% of consumers decreased or stopped merchant patronage entirely.
  • Two calls to resolve the dispute: 50% of consumers decreased or stopped merchant patronage entirely.
  • Three calls to resolve the dispute: 59% of consumers decreased or stopped merchant patronage entirely.
  • Four calls to resolve the dispute: 63% of consumers decreased or stopped merchant patronage entirely.

These statistics should not surprise merchants. The more stressful and intense the dispute process, the more disenchanted the consumer becomes with the merchant. Exacerbating this situation is how consumers respond and support similar merchants after a dispute. An overwhelming 63% of consumers who have gone through the dispute process are cautious about supporting merchants similar to the primary merchant.
Supporting Customer Loyalty
By their nature, CNP sales models do not encourage a consumer-merchant connection. That’s why it is so important for CNP merchants to put processes in place that establish a relationship with their consumers, especially when they have an issue with a purchase.
Collaboration solutions like Verifi’s Order Insight™, which connects consumers with merchants and issuers with relevant transaction information, can help resolve disputes quickly with no negative impact on the brand.
Contact Verifi to learn how you can protect your consumer relationships and retain their hard-earned loyalty by preventing chargebacks before they turn into disputes.