For many merchants, chargebacks are a problem that keep getting bigger and harder to manage with each passing day. With deliberate fraud in card-not-present environments and consumer abuse of the chargeback process on the rise, chargebacks pose a growing threat to all businesses in the e-commerce industry. Merchants can't afford to sit back and let chargebacks eat away at their revenue.
It's possible to dispute chargebacks, but the burden of proof is on the merchant to present compelling evidence that demonstrates how the chargeback request should not be upheld. It's also up to the merchant to devise and implement chargeback prevention strategies that work for their business.
The problem is that every chargeback is different—there are many varied reason codes for chargebacks, and even a single reason code can encompass a wide range of situations, ultimately leading to the customer requesting a chargeback. There are no universally applicable methods for fighting and preventing chargebacks.
Chargebacks are a unique problem, and they require unique solutions. Successfully controlling them takes a combination of expertise, strategy, and tools—and one of the most promising tools to use against chargebacks is chargeback management software.
How does Chargeback Management work?
Chargeback management is the process of recovering revenue lost to chargebacks and analyzing your chargeback data to prevent future chargebacks from occurring. Companies who manage chargebacks effectively have secure transactions, higher customer retention rates and improved overall satisfaction rates.
Is Chargeback Management Software right for me?
Chargeback management software can be very effective at providing early, automatic responses to incoming chargebacks, and tracking/reporting functionality can provide you with useful, actionable information about how to win at chargeback representment and make operational improvements that will reduce chargebacks in the future. The caveat is that chargebacks are too dynamic and diverse to be handled effectively by a system that is entirely automated by software programs.
Chargeback management software is only as effective as the human intelligence operating it and acting on the information it provides.
Is Chargeback Management Software effective?
We would say the best way to control chargebacks would certainly involve various software solutions, but currently, human intelligence still remains the best solution for effective chargeback management. Chargeback management software can be effective but only in limited instances.
What is the most efficient way to fight chargebacks?
There are many considerations to factor in to chargeback management, since every business—and every chargeback—is unique.
For some companies, handling chargebacks in-house with carefully selected software tools may be the most cost-effective way of dealing with the problem.
For others, it may make more sense to outsource chargebacks to professional experts with full suites of the latest and most powerful chargeback management software at their disposal.
At the end of the day, the best way to control chargebacks is the one that produces the best results for your company, as measured by your return on investment—the difference between what you're paying for chargeback management and the amount of revenue you're winning back through representment or retaining by lowering your overall chargeback rates.
In-house or outsource?
Weigh the pros and cons for each option and find out the top reasons why businesses decide to hire a chargeback management company in the eGuide, 4 Reasons to Hire a Chargeback Management Company.
