Chargeback Management 101

Must Read

Chargebacks are one of the biggest blights in the e-commerce scene. They are becoming a form of threat that a lot of merchants and business proprietors must face overall. Chargeback abusers and deliberate fraud scenarios are not the only things merchants have to worry about overall. But the near point is that there are countermeasures to all of these circumstances. That is where chargeback management takes the spotlight. But what is chargeback management? Can it help? What do you need to do to make it happen? Let’s find out.

Chargeback Management

Chargeback management is the process of retrieving lost profit or revenue due to chargebacks. In addition, chargeback management allows seeking opportunities to avoid such circumstances from happening in the future.

Chargebacks are different kinds of problems. So you have to fight them back with more unique means. You can deal with them using a combination of strategy, skill, and equipment. But one of the best ways you can counter them is through the use of chargeback management software. We’ll get to them in a moment.

The Types Of Chargebacks

With such a diverse industry to work in, you cannot expect that there would only be one kind of chargeback. Here are the various types of chargeback that happen in the business.

  • Customer or merchant error

This one is the most common chargeback that happens in the industry. These errors are seemingly small mistakes that customers and merchants can make at any time during a transaction.

  • Criminal fraud

Customers might discover unsolicited transactions in their cards and accounts. That is the time they file for a chargeback. The downside to this aspect is that the merchant will take most of the blow. The merchant will have to compensate a customer to end the matter.

  • Friendly fraud

With friendly fraud, what happens is that customers dig and utilize any loopholes that they find within the chargeback system. These customers can, in turn, exploit and steal from merchants and business owners.

Besides these types of chargebacks, there are other issues that can lead to chargebacks:

  • Customers canceling the transactions and asking for returns

Once a customer decides to return a product, it will result in a chargeback. However, these issues are authentic, meaning the individual who wants to return an item has a legitimate reason to do so. It is not a form of fraud. 

  • Affiliate fraud

Affiliate fraud happens when concerned marketers deliberately allow transaction errors. It results in the merchant losing more revenue before they find out about the matter.

  • Errors in packing, shipping, and delivery

These are all fulfillment issues that will consequently lead to a chargeback. 

  • Communication errors

It is paramount to have communication and customer service for your potential clients. This matter is ideal for customers who are awaiting orders. You have to talk with clients before, during, and after the transaction and delivery of goods. Doing so will lead to a good rating or review.

  • Authorization and processing mistakes

Processing and authorizing errors are faults that merchants can make every once in a while. Obviously, these will lead to chargebacks and will impact your revenue.

Fighting Back

There are chargeback management tools and software available that merchants and business owners can utilize to fight against chargebacks. These applications and programs have numerous variations, each having a dedicated purpose and chargeback to manage. These tools are tremendously beneficial and will work against chargebacks for good. Here are some of the functions of chargeback software:

  • Fraud detection

Chargeback software and tools will detect fraudulent activities that customers and marketers conduct. You may use the software to stop the transaction before it happens and to halt any payment from going through.

  • AVS

Address verification service or AVS will allow you to compare a customer’s billing address with the one they are paying at any time. You may utilize this option for high-end transactions where large sums of money are involved.

  • Credit card validation

Every credit card out there has a card security code. The credit card validation option will allow you to verify the code with a card company. Any discrepancies might be a potential scam or fraud action.

  • Black listing

Chargeback software also has a feature that lets you check if a customer is part of a list. You can identify and stop any transactions from such a customer. You may even report them to the authorities.

  • Chargeback notification

In addition, the software will let you know if a chargeback is in the works against you or your business. You can take the necessary steps to work on it afterward. The software also will allow you to communicate with the chargeback issuer so you can talk it through.

Help Is Available

You have the choice of getting help online from sites and companies that deal with chargeback management. It will not be tough to find and hire one. But do your homework first before you decide that chargeback management is the right one that will assist you with your chargeback issues.

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Note From Editor

This article is being reviewed by our editorial board and is being approved for publication in accordance with our editorial policies.

Must Read

Chargebacks are one of the biggest blights in the e-commerce scene. They are becoming a form of threat that a lot of merchants and business proprietors must face overall. Chargeback abusers and deliberate fraud scenarios are not the only things merchants have to worry about overall. But the near point is that there are countermeasures to all of these circumstances. That is where chargeback management takes the spotlight. But what is chargeback management? Can it help? What do you need to do to make it happen? Let’s find out.

Chargeback Management

Chargeback management is the process of retrieving lost profit or revenue due to chargebacks. In addition, chargeback management allows seeking opportunities to avoid such circumstances from happening in the future.

Chargebacks are different kinds of problems. So you have to fight them back with more unique means. You can deal with them using a combination of strategy, skill, and equipment. But one of the best ways you can counter them is through the use of chargeback management software. We’ll get to them in a moment.

The Types Of Chargebacks

With such a diverse industry to work in, you cannot expect that there would only be one kind of chargeback. Here are the various types of chargeback that happen in the business.

  • Customer or merchant error

This one is the most common chargeback that happens in the industry. These errors are seemingly small mistakes that customers and merchants can make at any time during a transaction.

  • Criminal fraud

Customers might discover unsolicited transactions in their cards and accounts. That is the time they file for a chargeback. The downside to this aspect is that the merchant will take most of the blow. The merchant will have to compensate a customer to end the matter.

  • Friendly fraud

With friendly fraud, what happens is that customers dig and utilize any loopholes that they find within the chargeback system. These customers can, in turn, exploit and steal from merchants and business owners.

Besides these types of chargebacks, there are other issues that can lead to chargebacks:

  • Customers canceling the transactions and asking for returns

Once a customer decides to return a product, it will result in a chargeback. However, these issues are authentic, meaning the individual who wants to return an item has a legitimate reason to do so. It is not a form of fraud. 

  • Affiliate fraud

Affiliate fraud happens when concerned marketers deliberately allow transaction errors. It results in the merchant losing more revenue before they find out about the matter.

  • Errors in packing, shipping, and delivery

These are all fulfillment issues that will consequently lead to a chargeback. 

  • Communication errors

It is paramount to have communication and customer service for your potential clients. This matter is ideal for customers who are awaiting orders. You have to talk with clients before, during, and after the transaction and delivery of goods. Doing so will lead to a good rating or review.

  • Authorization and processing mistakes

Processing and authorizing errors are faults that merchants can make every once in a while. Obviously, these will lead to chargebacks and will impact your revenue.

Fighting Back

There are chargeback management tools and software available that merchants and business owners can utilize to fight against chargebacks. These applications and programs have numerous variations, each having a dedicated purpose and chargeback to manage. These tools are tremendously beneficial and will work against chargebacks for good. Here are some of the functions of chargeback software:

  • Fraud detection

Chargeback software and tools will detect fraudulent activities that customers and marketers conduct. You may use the software to stop the transaction before it happens and to halt any payment from going through.

  • AVS

Address verification service or AVS will allow you to compare a customer’s billing address with the one they are paying at any time. You may utilize this option for high-end transactions where large sums of money are involved.

  • Credit card validation

Every credit card out there has a card security code. The credit card validation option will allow you to verify the code with a card company. Any discrepancies might be a potential scam or fraud action.

  • Black listing

Chargeback software also has a feature that lets you check if a customer is part of a list. You can identify and stop any transactions from such a customer. You may even report them to the authorities.

  • Chargeback notification

In addition, the software will let you know if a chargeback is in the works against you or your business. You can take the necessary steps to work on it afterward. The software also will allow you to communicate with the chargeback issuer so you can talk it through.

Help Is Available

You have the choice of getting help online from sites and companies that deal with chargeback management. It will not be tough to find and hire one. But do your homework first before you decide that chargeback management is the right one that will assist you with your chargeback issues.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

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