The proper chargeback management strategy is necessary for any company to maximize its profitability. Unfortunately, chargebacks can wreak havoc on any business, big or small, costing your business lost revenue, damaging banking relationships, and risking a terminated merchant account. This article breaks down everything you need to know about chargeback management and explains why we believe we are the best chargeback management company.
In 2023, chargeback costs are said to hit over $117 billion, boasting a 40% increase in friendly fraud. On top of this, currently, the average chargeback ratio across all industries is above .6%. With chargeback costs rising and friendly fraud soaring, partnering with a chargeback management company has never been more critical.
While friendly fraud and true are both on the rise, it’s important to note that many companies are not adequately managing their chargebacks/disputes. By working with a chargeback management company, you will instantly see results and find your bottom line increasing.
Applying For Chargeback Management Services Today
If you’re looking to stamp out fraud before it begins and have your chargebacks managed for you, you’ve come to the right place.
Below you will find what you need to apply with CB-ALERT today:
- Company name
- Registered business address
- Merchant account descriptor
- Merchant account number issued by your payment processor
- Access to your sales system to provide refunds/resolve alerts for you
The more information you can provide us, the faster we can get you set up and fighting chargebacks.
What Is Chargeback Management?
Chargeback management refers to dealing with chargebacks, which occur when a customer disputes a transaction with their bank or credit card company. Chargeback management involves:
- Investigating the reason for the chargeback – By doing this, we can determine the type of chargebacks you receive frequently.
- Providing evidence to dispute the claim if necessary – This part of chargeback management is typically time-consuming as all of the evidence needs to be compiled and sent to the bank. We handle all of this for you.
- Attempting to resolve the issue with the customer – If you are using chargeback alerts such as Ethoca alerts or Verifi alerts with CB-ALERT, you will be given a chance to solve the issue with the customer before a chargeback occurs.
Chargeback management companies will take care of all these tasks for you, saving time and resources.
Effective chargeback management can help merchants minimize the number of chargebacks they receive, reducing costs and protecting their reputation. It typically involves implementing fraud detection, such as chargeback alerts and prevention measures, improving customer service, and maintaining accurate records of transactions and customer communication.
Chargeback Management Strategies
At CB-ALERT, we focus on three categories for chargebacks: friendly fraud, true fraud, and merchant error – which covers many issues.
We handle these categories slightly differently and use them to determine the type of fraud your business is experiencing. We then devise a strategy to not only win disputes but also prevent chargebacks in the future.
Chargeback Management For Friendly Fraud
Friendly fraud is growing at an astronomical rate. Since chargebacks were created to protect cardholders, cardholders who are fraudsters have wisened up and are starting to abuse merchants by filing illegitimate disputes.
Friendly fraud typically happens as follows:
- The cardholder mistakes a purchase on their statement and claims that they never made the purchase.
- The cardholder made a purchase and has decided to pretend that they didn’t make the purchase.
Chargeback Management For True Fraud
True fraud often occurs from third-party criminal use. For example, someone steals a cardholder’s identity/card information and uses it to make purchases.
This type of fraud is often mistaken for friendly fraud, and merchants typically think they receive far more true fraud than is true.
At CB-ALERT, we will determine whether or not the fraud is true or friendly. From there, we will devise a plan to make it easier to determine true fraud quickly.
For most e-commerce merchants, fighting friendly fraud is often wise through measures such as representment. While it takes work to win these types of chargebacks, you can significantly increase your chargeback win percentage by setting up a proper strategy for dealing with chargebacks.
Chargeback Management For Merchant Error
It is estimated that between 20-45% percent of chargebacks are merchant errors. Typically, when merchants come to us, we can immediately identify areas to clean on the merchant’s website.
While it is troubling to receive these types of chargebacks, the good news is that these are entirely preventable.
We often find that merchants need proper return policies, terms of service, product descriptions, and lousy customer service.
Most customers will likely contact your customer services before calling their bank. Therefore, you hurt your chances of fighting a dispute if you have a slow response time or need an easy-to-access customer service portal.
Chargeback Management Benefits – Is It Worth It?
There are many benefits to chargeback management. While the main reason for chargeback management is to recover revenue and improve your reputation, let’s look into chargeback management for pre-transaction and post-transaction.
The main focus of chargeback management before a transaction is to avoid chargeback fees altogether. To accomplish this, fraud prevention systems will be put in place, previous chargebacks will be analyzed, and your company website will be optimized to fight fraud.
Let’s take a look at the main goals of pre-transaction chargeback management:
- Avoid Chargeback Fee
- Improve banking relationships
- Increase profits
- Lower risk of chargebacks
- Increase fraud prevention efforts
- Create sustainability
Post-Transaction Chargeback Management
- Recover lost revenue
- Halt future chargebacks
- Improve customer service
While you will pay upfront costs for a chargeback management team, you are saving your company from endless chargebacks that destroy your bottom line and put you at risk of merchant account termination.
Why Choose CB-ALERT For Chargeback Management?
Regarding chargeback management, we boast over 20 years of credit card processing experience and understand why chargebacks occur, how to manage them, and how to prevent them in the future.
CB-ALERT can be a significant partner when it comes to growing your business and lowering your chargeback ratio:
- Alerts in real-time Ethoca and Verifi
- 24/7 customer service
- Transparent pricing
- Gateway/CRM agnostic
- Order Insight
Can Chargeback Management Be Done In-House?
Technically, yes, this can be done in-house. However, with that being said, it will need to be done by someone with a great understanding of card schemes, chargebacks, and fraud.
The person would also need to be available frequently as this is extremely time-consuming. Professional companies also know the card schemes far better than most individuals and can handle these tasks faster as they deal with them daily.
Your Chargeback Management Company
We are an excellent fit for all serious businesses looking to save money on chargebacks. Our background in credit card processing also helps us see everything from a merchant’s perspective.
We genuinely care about growing your business and understand that time is money. By partnering with CB-ALERT, we guarantee you will save time, reduce costs, and grow your business.