Chargeback Management Software

For many merchants, especially those in eCommerce, chargebacks are a problem that keeps getting bigger and harder to manage with each passing day. With deliberate fraud in card-not-present environments and customer abuse of the chargeback process on the rise, chargebacks pose a growing threat to any business that accepts online payments.

Merchants can't afford to sit back and let chargebacks eat away at their revenue. Fortunately, there are ways to fight back. There are two methods merchant can employ to lessen the harm done by chargebacks: preventing them and fighting them.

It can take a lot of knowledge and resources to bring down a rising chargeback rate. Dealing with them effectively takes a combination of expertise, strategy, and technological tools. Is chargeback management software an effective solution to this ever-present problem?

  1. How Does Chargeback Management Work?
  2. What is Chargeback Management Software?
  3. Is Chargeback Management Software Right for Me?
  4. Is Chargeback Management Software Effective?
  5. What are the Different Approaches to Chargeback Software?
  6. What are the Three Types of Chargeback Software?
  7. What is the Most Efficient Way to Fight Chargebacks?
  8. Conclusion

How Does Chargeback Management Work?

Chargeback management is the process of recovering revenue lost to chargebacks while analyzing your chargeback data to prevent future chargebacks from occurring. Companies that manage chargebacks effectively have more secure transactions, higher customer retention rates, and improved overall satisfaction rates.

What is Chargeback Management Software?

Chargeback management software can be used by merchants or their partners to prevent and fight chargebacks by managing internal records, analyzing chargeback data, and integrating with external tools like chargeback alerts. This software can be run by merchants directly or by chargeback professionals.

Is Chargeback Management Software Right for Me?

Chargeback management software can provide automatic responses to incoming chargebacks based on your preferences. Tracking and reporting functions can provide you with actionable information about how to win chargeback disputes and make operational improvements that will reduce chargebacks in the future.

The caveat is that chargebacks are too dynamic and diverse to be handled entirely by a piece of software.

Chargeback management software is only as effective as the person operating it and acting on the information it provides.

For merchants who don't have the time to make themselves chargeback experts, an increasingly common solution is to hire a chargeback management company to deal with the problem for them. These companies can handle all aspects of chargeback management while providing the merchant with tools that give them insight into the disputes they’re receiving.

The right firm will provide a positive ROI and give merchants the tools and knowledge they need to make meaningful reductions to their chargeback rate.

Is Chargeback Management Software Effective?

Chargeback management software can help you apply your skills to a greater number of chargebacks without getting things mixed up, but at the end of the day, it's still human expertise that's at the core of chargeback management.
 

The best way to put chargeback software to use is to combine it with expert human analytics and intelligence.

One example of this would be using software to track chargebacks through their entire life cycle.

Tracking chargebacks is an important part of managing them. Individual chargebacks can be tracked manually by making notes when they are first received and as they work their way through the multi-step chargeback process. Of course, this becomes quite unwieldy at scale, when you reach the point where you’re dealing with multiple incoming chargebacks on a frequent basis. Using chargeback software can make it much easier to track them, and you can be assured that you’ll never miss an important notification or status update.

What are the Different Approaches to Chargeback Software?

fraud Prevention- Proven Strategies to prevent e-commerce fraud
Chargeback management software generally focuses on one of three areas: stopping true fraud disputes, stopping chargeback fraud disputes, or responding to disputes. Some software integrates external tools in order to handle more than one of these areas.
 
The term “chargeback tool” invariably means chargeback software. Chargebacks are communicated and processed entirely electronically, and to automate the process of dealing with them, you’ll need technological solutions that can integrate with your CRM and other software that you use to manage customer data and payments.

What are the Three Types of Chargeback Software?

Chargeback management software comes in three basic types: SaaS platforms that merchants can license for self-management, managed software used by third-party chargeback management experts, and hybrid solutions that combine aspects of both for flexibility.

What is the Most Efficient Way to Fight Chargebacks?

For merchants that receive very few chargebacks, learning how to manage them in-house is often the most cost-effective solution. For those who deal with chargebacks more often, it's often a good idea to outsource chargeback management to professionals.

New call-to-actionA professional chargeback management company will have expertise in preventing and fighting chargebacks well beyond that of any in-house team. They will also have access to the latest tools for both managing chargebacks and preventing fraud. While this expertise and experience doesn't come cheap, the right chargeback management company will give you ways to evaluate the ROI you're getting from their services in order to demonstrate their value.

At the end of the day, the best way to manage chargebacks is the one that produces the best results for your company. Weigh the pros and cons for each option, and find out the top reasons why businesses decide to hire a chargeback management company in our eGuide, 4 Reasons to Hire a Chargeback Management Company.

Conclusion

There’s no single, one-size-fits-all solution for managing chargebacks. Ever dispute is unique, and relying too heavily on an automated, software-driven approach can leave you vulnerable to the many unexpected and unusual forms that disputes can take.

Chargeback management software can serve an important purpose, but a lasting and sustainable approach to getting chargebacks under control always requires the kind of analytics and insight that only human intelligence can provide. As long as you’ve got that, chargeback software can be a powerful weapon in your arsenal—but without it, you’re always going to be playing catch-up.

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Get the guide, Chargebacks 101: Understanding Chargebacks & Their Root Causes

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