The increase in ecommerce, as well as restaurant takeout/delivery, has also increased the number of chargebacks, whether malicious fraud, friendly fraud, or merchant error, and it’s creating a lot of problems for merchants of all kinds.
A PaymentSource.com article back in March discussed the ways of merchants can use technology can reduce the number of chargebacks they face.
And as sales drop for individual merchants, even as industry chargebacks increase, this can put a real hurt on a merchant’s bottom line. That means merchants need to try a new approach to reducing chargebacks that involve using technology in a way you might not have done before.
Or as PaymentSource says, merchants should use a multi-layered fraud detection strategy.
Since chargebacks come from one of three sources — criminal fraud, friendly fraud, and merchant error — if you can easily identify the first source, you can then concentrate on the latter two.
PaymentSource says there are a number of different fraud detection tools that you can use, including Address Verification Services, CVV verification, 3-D Secure, and geolocation.
For example, if you’ve ever purchased gas in a different part of town or on a road trip, and you’ve gotten a phone call or text from your bank asking if that was you, that’s geolocation in action.
If you’ve ever been asked to provide your CVV code from the back of your card, that’s, well, CVV verification. (Including this step can help online merchants reduce card not present (CNP) fraud, which merchants have to pay back.)
Make sure you share your contact information with your customers. You want customers to contact you with complaints rather than calling the bank to issue a chargeback. Also, make sure your customer service reps are properly trained in helping customers find a resolution to their problem and empowered to give refunds under a certain dollar amount.
(Remember, chargeback fees are as much as 300% of the original purchase amount, so a $100 purchase can result in a $300 chargeback. You may not like refunding a $100 purchase, but it beats the bank taking $300 out of your account.)
Be sure to monitor all social media complaints and problems. Sometimes customers don’t want to wait for 30 minutes on a customer service call, so they post their complaint on social media. Customer service reps in social media-friendly companies are trained to respond quickly and efficiently, and can often solve a problem before the phone rep can even get to the call.
One classic example of great social media-based customer service is Comcast Cable. The company is notorious for having some of the worst customer service in the industry, but their social media customer support has set the industry standard for customer response.
Finally, implement smart chatbots on your website and mobile app. Rather than keeping customer service reps tied up with basic calls that can be handled by anyone with a pulse — “Did you turn the router off and on again?” “What’s the status of my order?” — set up a chatbot with an extensive library of ways to answer very simple questions so your human reps can handle the more complicated questions.
You can’t fight chargebacks the way you used to, with a steely eye and sharp attention to detail. You don’t have that much time and there are patterns that may by lying under the data, but could be found much more quickly with an AI system than you could with your human brain.
For more information on fighting chargebacks and saving more of your money, CB-Alerts can help. To learn more, please visit the CB Alert website.
Photo credit: geralt (Pixabay, Creative Commons 0)