Every merchant knows the frustration of being hit with chargebacks, and you’re probably tired of the delay in dealing with that 20 – 30-day resolution cycle, especially since you only have five days to respond to any chargebacks. The rest of the time you spend waiting for the bank to respond and bring this matter to a close.
Rapid Dispute Resolution is a tool that Visa uses to help merchants reduce the number of chargebacks while speeding up the entire resolution process. When an acquiring bank is about to issue a chargeback that counts against your merchant account, the RDR lets your issuing bank automatically issue a credit to your customer first.
This way, you won’t actually be dinged with the chargeback, which can count against your merchant rating. Too many chargebacks and you could be put in the card networks’ monitoring programs, which means you’ll be hit with higher fees and interest rates as the network makes sure you’re following all their rules and regulations.
You can always contest a dispute and fight it by letting it progress to an actual chargeback. This way, you can tell your side of the story, show the transaction documents, including any receipts, evidence of acceptance, a packing list, invoice, signed receipt form and so on in order to defend yourself.
But if you ever want to skip all that because there really is something to the customer’s complaint, then you can save yourself a lot of headache and hassle by letting your issuing bank grant the refund and head off trouble.
The Benefits of Rapid Dispute Resolution
There are a few reasons to participate in the RDR program.
- Increased revenues. Instead of losing chargebacks, which means lost revenue as well as unrecovered costs, you can keep more of your sales and revenue.
- You’ll know about disputes in hours and days. Many chargebacks and disputes could take weeks. With RDR, you’ll be notified a lot quicker and you can solve the problem that much more quickly, removing that problem from hanging over your head.
- Lower chargeback rates By dealing with disputes quickly, they won’t become chargebacks. This alone will keep your rates down.
- More satisfied customers. Customers who receive a faster resolution, even if it’s related to a complaint, will help improve their perception of your business.
How to Make Rapid Dispute Resolution Work for You
If you have enrolled in RDR — CB-ALERT can help you with this, by the way — the first thing to do is to set your response rules. That is, you’ll allow RDR to automatically issue the credit for you if it’s below a certain level, like $30, or an instance of fraud. This avoids dealing with official chargebacks and keeps them off your merchant account, which keeps you out of the monitoring programs.
But if you decide you want to fight the dispute, you can let it progress to the chargeback stage so you can present your own evidence and contest their claim. You’ll want to do this if you think the chargeback is bogus or that you have a good chance of winning.
(Remember, if you don’t set the rules, the RDR will grant a refund for every claim, including the ones you wanted to contest.)
Once you’ve reconciled each dispute, be sure to keep track of them, which can help if you’re trying to keep track of friendly fraud. You can detect patterns and find your best customers and worst customers by. analyzing your data. You should be doing this anyway with your sales reports, CRM, marketing and advertising, and so you should do it with your credit card processing, including disputes and chargebacks.
Keep an eye for any kinds of patterns, such as the same customer making repeated disputes, or chargebacks happening at the same delivery address, or even a lot of low-value disputes (which can often indicate fraud).
If you want to reduce the number of chargebacks by issuing credits sooner, handling more of your low-value disputes automatically, and analyzing all of your data to find patterns of fraud or other problems, then CB-ALERT can help you with the Rapid Dispute Resolution program.
Photo credit: Amtec Photos (Flickr, Creative Commons 2.0)