Steps in Fighting Chargebacks

E-commerce fraud is on the rise globally. It is important to make improvements to ways to deal with chargebacks. Chargeback management services are essential in managing your business’ losses. In most cases, fraud chargebacks occur when a person uses another person’s bank card to buy products from a store. Such a scenario results in deductions from the cardholder’s account for an item never bought by the cardholder.

This is referred to as fraud with chargebacks aiming to protect businesses. There are cases of friendly that can be referred to as friendly fraud. In this, a client argues that the charges are fraudulent with the aim of getting away with the products bought. To deal with chargebacks effectively, here are some steps to follow:

Identify the form of fraud

It is important to determine the kind of chargebacks you are handling. With the help of a chargeback company, you can conduct data analysis. The analysis helps trace the details back to the initial transaction to evaluate the claims of validity.

Activate prevention alerts

Having alerts to reduce the rate of chargebacks for your business. As a merchant, the alerts allow you to refund clients to avoid the chargebacks from becoming disputes. Consider advanced levels of alerts warning against a dispute on any transaction to ensure the value of items is not lost.

Presence of underlying issues

Take keen consideration of any anomalies or unusual patterns that may lead to disputes in transactions. To determine any underlying issues, analyze the chargeback information and prevention warning to provide a reliable solution to reduce risk and chargebacks.

Establish procedures and effective policies

Analyzing data plays a significant role in handling chargebacks.  Assess the current procedures and policies to determine the chances of making profits or losses, the exposure to risk, and the possible friction with the changes.

Assess the type of the chargeback

Chargebacks that fall under friendly fraud can be handled or fought. Not all instances of fighting friendly fraud are worth the effort and time. Here are ways to determine the validity of a chargeback:

1.    The chargeback value

Before any step, find out the chargeback amount. Some chargeback amounts are not worth spending time on. If the chargeback amount is low, the impact on your business will be negative returns on the investment. Be keen to ensure that you do not spend a higher amount than the value to be recovered.

2.    Consider the expiration date.

Every chargeback has a date of expiry. The final day you can give a response is also known as the cutoff date. Responses submitted past the expiry date are not accepted. After the cutoff date, fighting a chargeback issue is focusing on a case with no chances of emerging victorious.

3.    Check your evidence

To win a chargeback fight, you need to have valid evidence. This is the only way to disprove the claims made against your transaction. Lack of evidence reduces the chances of winning the chargeback fight.

Fraud in the form of chargebacks costs merchants money as well as consumes a lot of time. It is advisable to hire a chargeback company to help with the management of chargeback disputes.