One way for companies to reduce chargebacks is to prevent them from ever happening in the first place. Another way is just to fight every dispute that comes your way, regardless of size and amount. That’s because chargebacks count against your dispute ratio, and if you get enough of them, you’ll be placed in your card networks’ monitoring services which means you pay a higher percentage of all your transactions.
Chargebacks may happen in the natural course of your business, but that doesn’t mean they have to be an accepted part of it. We often recommend that companies fight the chargebacks, but you’re probably aware that there are some chargebacks and disputes it’s just not worth fighting. That $8 dispute is probably not worth the hassle and it’s just easier to give a refund in the first place.
Of course, this is a better option than letting a chargeback run its full course because, with all the additional fees and penalties, that can end up costing you up to three times the original cost. So that $8 dispute could end up costing you $24.
It would be handy to have someone handling your disputes and chargebacks for you. But if you’re already fighting to keep your business going, you can’t really afford to hire someone to manage your disputes for you.
This is where the Pre-Dispute Resolution Solutions from Verifi can come in handy.
Verifi, a Visa company, knows the problems companies face. You have problems with shipping, and you’re also facing more fraud as buyers try to game the system and get refunds from their banks without involving the sellers.
A buyer might place an online order for a product — let’s say, very expensive bicycle racing tires — and once they arrive, they’ll contact their bank to say the shipment never arrived. This leaves the merchant totally out of the picture, and they can’t work to resolve the issue or even check their records to find out this is the third delivery to mysteriously fail to arrive. (This happens with restaurants all the time.)
While companies like Amazon take pictures of the deliveries they make in order to prove that they did make the drop-off, smaller companies that rely on UPS and FedEx may not have that option available to them. So a “missing” shipment might be missing, but it might just be the customer is trying to pull a fast one.
But with the Pre-Dispute Resolution Solutions, merchants have their own people to manage their disputes in the form of a bank’s own customer service reps.
PREVENT and RESOLVE with Pre-Dispute Resolution
Verifi’s pre-dispute solutions will manage your customer inquiries with their banks without you ever having to get involved. It takes some early work on your part, but if you get plugged into the system, you’ll be able to reduce the number of disputes you have to manage in the first place.
We’ve written in the past about Verifi’s PREVENT solution, which is basically a collaboration tool. It allows the bank personnel, as well as their customers, to see the transaction details about a particular purchase.
Basically, when a customer calls in a dispute for a charge they don’t recognize, the bank representative can quickly review the purchase and discuss the transaction details to confirm whether a sale took place, or if this were an example of friendly fraud, such as a family member making the purchase without telling anyone else in the family, like a kid making huge in-app purchases with a parent’s credit card. (We’ve heard this referred to as “family fraud.”)
These details can also be provided through the bank’s online portal or mobile app, which means the cardholder can solve the problem on their own without ever contacting the bank in the first place.
It works because you, the merchant, provide your transaction data to Verifi’s global network, and the issuing bank can access it on the Visa Resolve Online (VROL) platform).
The RESOLVE solution helps deal with other issues: true fraud, a defective product or service, a canceled subscription that didn’t get properly canceled. Or maybe those small disputes that aren’t worth your time and energy to fight.
The way RESOLVE works is to fix the dispute at the pre-dispute stage, which keeps a chargeback from ever happening. This is an automated, AI-driven Rapid Dispute Resolution (RDR) program, which lets merchants set the rules for immediate resolution.
For example, you could say that you will automatically grant a refund for any charge under a certain amount like $25, or for failed deliveries, or fraud disputes.
And just like PREVENT disputes, inquiries and submissions in the RDR system do not count against a seller’s dispute ratio.
Sellers benefit from the Verifi solutions because they prevent and resolve disputes at the pre-dispute stage, which keeps them from becoming chargebacks and dinging your dispute ratio. That helps you avoid the costly monitoring programs that charge you extra fees. It reduces your workload in dealing with all of these disputes. And it keeps your customers happy so they’ll come back to you, which is always better than fighting to find new customers.
To learn more about how CB-Alert can help you use the Pre-Dispute Resolution solutions to reduce and prevent chargebacks, please visit the CB Alert website.
Photo credit: Verifi (A Visa Solution)