The Chargeback Triangle: Contact Points

There’s no question that the chargeback process is complex and needs fixing. The impacts of chargebacks go beyond merchants and issuers, extending to customer service personnel and consumers.
It takes a commitment by merchants and issuers to open the lines of communication and a willingness to become true partners to solve the industry’s $31 billion chargeback problem.
If successful, merchants and issuers can collaborate, help themselves, and succeed in keeping customers happy and loyal. The objective for both merchants and issuers is to prevent a transaction dispute from escalating into a chargeback and maintaining a lasting customer relationship.
How to Create Effective Chargeback Prevention
As explained in the Verifi-sponsored Javelin Strategy & Research report, The Chargeback Triangle, addressing the challenge of chargebacks requires coordinated effort among the three primary parties in the dispute – the merchant, the issuer, and the consumer – comprising the chargeback triangle.
When solutions are in place that enable open communication, information-sharing, and proactive chargeback prevention, everyone wins. Merchants can better focus on their core business and dedicate fewer resources to chargeback management. Issuers can improve their relationships with merchants and prevent costly drains due to dispute processing. Consumers enjoy an enhanced experience and are more likely to remain loyal to merchants and issuers who proactively solve their problems.
The key is having the right tools, solutions, and mindset to make the chargeback triangle work toward mutual benefit. By understanding the full benefits of merchant-issuer collaboration, each can reduce the cost of chargebacks.
The Chargeback Triangle offers several recommendations that can drive success.

  • Information-sharing is key. Sharing transaction data allows merchants and issuers to make better decisions about which disputes to pursue. Merchants can reduce investments in manual processes, and issuers can get ahead of consumers who are abusing the dispute process.
  • Connect the customer with the merchant. When there are problems with the goods or services, issuers should direct the consumer to the merchant who has the information needed to help solve the customer problem.
  • The more the data the better. Issuers can help their customer service team by collecting as much data as possible about the problem before connecting the consumer with customer service. This can solve the problem in a single phone call.

When they don’t recognize a credit card charge or have questions about a purchase, consumers typically feel their only recourse is to file a chargeback with the issuer. But merchants can avoid this costly process by using solutions to support merchant-issuer collaboration and take steps to improve customer communication.

  • Better billing descriptors. Prevent forgotten or unrecognized purchases and subscription renewals with full product details. Include information such as the item and date of purchase, and specific product details like size, quantity, color, etc.
  • Customer history. Have easy access to the customer’s transaction and dispute history, including disputes filed, refunds issued, and account delinquency to enable merchants to identify repeat fraud offenders.
  • Merchant details. Provide complete merchant details on the consumer’s credit card statement, including name, address, and customer service phone number.
  • Device information. Prevent customer confusion over how and when the purchase was made by including the device type and name used for the purchase.
  • Cardholder information. Clear up the billing confusion by providing as much unique cardholder information as possible, including the IP address, phone number, email address, name, and username.

Chargeback Triangle Success Points
Honest consumers simply want their questions answered and problems solved. When this happens quickly and smoothly, they remain loyal customers and are less likely to post negative reviews or social media comments.
On the flip side, many consumers feel like they’re getting the run-around from the merchant and issuer leaving them disgruntled with the entire experience. This is why merchant-issuer collaboration is so important to deliver a superior customer experience.
Contact Verifi to learn how our payment solutions, including Order Insight and CDRN, enable a proactive and collaborative chargeback prevention environment that helps protect your revenue.