How Retail Merchants Can use Order Insight to Prevent Credit Card Disputes

Every retail merchant will have to deal with disputed charges and unhappy customers at some point. It’s just a fact of life. Whether it’s a customer who doesn’t recognize a charge on their statement, someone whose shipment never arrived, a case of friendly fraud, or even downright identity theft, there will be people who call their bank to dispute a charge on their credit card statement.

Some of these are easy to deal with, while some of them are more difficult and require more attention.

The customer who doesn’t recognize the charge on her credit card statement can be reminded of what that purchase actually was.

“That was the Starbucks in the Maple Shopping Center at 2:37 in the afternoon,” the customer service associate says.

“Oh, that’s right,” says the customer. “I stopped there after yoga.”

Problem solved. Banks get a lot of these calls all the time.

But what happens if the call is about a missing shipment? Ideally, the customer should call the merchant, register the complaint, and you’ll send out a replacement. But they don’t always call the merchant.

Or what if they changed their mind on the order, but can’t be bothered to return the item? Or the customer who says the shipment never arrived, and it did? Or the food delivery customer who said their $100 order had one thing wrong with it and disputes the entire charge? That’s friendly fraud.

And, of course, there’s the identity thief who steals a credit card or creates one in the victim’s name and buys electronics, gasoline, or food.

If you have a lot of these disputes, it’s easy to either let some of them fall through the cracks, or you spend so much time dealing with them that you don’t have enough time to focus on your business.

In any case, when a call comes in, the bank files a chargeback and takes the money out of your account or a reserve account and you take the hit. Plus if it’s a true chargeback and not just a refund, you’re hit with extra fees and charges which could as much as triple the original charge. Not to mention each chargeback counts against your chargeback ratio, which can ultimately hurt your merchant account and lead to a lot of extra charges in the future.

Enter Order Insight from Verifi

Order Insight is a new program from Verifi (a Visa company) that helps you reduce disputes, chargebacks, loss of chargeback fees, and keeps your customers happy and returning to buy more.

Order Insight lets merchants provide transaction data to your customers and to the issuing bank. It even lets the issuing bank’s own customer service representatives act as your customer service reps and work to prevent disputes at the first customer inquiry.

The Order Insights process from Verifi (a Visa company)

According to Verifi, this is how it works:

  • Customer contacts issuer with a transaction dispute
  • Issuer sends request for order information
  • Order Insight processes and sends request to seller
  • Seller sends order data to Order Insight
  • Order Insight provides issuer with order details
  • Issuer reviews information with customer, dispute prevented

So in the above example, our Starbucks customer is reminded of her purchase and when and where she made it, either on her banking app or when she calls her issuing bank to ask about the charge.

The Order Insights system pulls transaction details from the merchant’s CRM to the customer’s mobile banking app and the problem is solved.

This solves a long-standing problem of garbled transaction codes on credit card statements like ##STARBPDX200701%#***. To someone who speaks fintech, that means “Starbucks Coffee, PDX Airport, Portland, OR, Jul. 1, 2020.” But to the average consumer, it’s hard to figure that out.

But if the transaction entry shows the logo and “Portland Airport” with the date, then the consumer (hopefully) isn’t confused about the purchase.

The entry can even contain information about where the merchant was located, along with a map, the amount spent, and even the items purchased. This way, if you see a purchase you don’t recognize — say, a 4K TV from Best Buy that’s 500 miles away — you immediately know if there was a problem or not.

That in and of itself can reduce so many customer service calls to banks that it can be a real game changer. It allows you to keep more sales and reduces chargebacks by handling disputes quickly and efficiently. It also helps consumers spot theft more easily, which can help reduce it.

In the case of lost items, Order Insights drives consumers back to the merchants so they can ask for refunds or replacements. If you’ve ever been hit with a real chargeback, you know it’s much easier and much more desirable to just issue a full refund. Better yet, just replace the lost or broken item at your own cost, and then fight with the delivery service and your insurance company for the replacement costs.

Order Insight also lets the issuing bank’s customer service rep access this information so it can be shared with the customer.

So if our Starbucks customer above calls her bank, she can be told, “You ordered a Starbuck’s green matcha frappuccino and a slice of lemon pound cake.”

When there’s a case of actual fraud, the issuing bank is notified sooner and they give the refund to the customer sooner, which eliminates the dispute call in the first place.

Not to mention Order Insight’s AI-based system also uses data from all the disputes and fraud notifications its monitoring to track trending fraud rates. It’s able to more easily detect fraud and even model what future fraud can look like, learning from its experiences and doing a better job of preventing fraud before it ever actually takes place.

Bottom line, Verifi says their Order Insight system has a dispute deflection rate of as much as 42 percent. Can you imagine how much time and money you could save if you could reduce your disputes by 42%? How much money could you save? How much time would it save if you didn’t have to respond to 42% of your credit card disputes?

If you have to deal with a lot of chargebacks and disputes in your work, CB-ALERT can help you prevent and fight them to protect your bottom line. For more information, please visit the CB Alert website.

Photo credit: Verifi (a Visa company)

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