Many online retailers are missing out on opportunities to win chargeback disputes, says Paul Brock, senior manager of managed services at payment processor and risk management provider CyberSource Corp. A common oversight: Customers getting duplicate credits for the same chargeback.
But 26% of online merchants try to recoup losses on less than 10% of chargebacks, and 16% don’t try to recoup any, CyberSource found in its 2008 Annual Online Fraud Report. 37% of merchants try to recoup losses on 90-100% of chargebacks, the study says.
To make it easier to review and contest chargebacks with the hope of recouping funds for customer purchases, CyberSource recently launched the Chargeback Recovery service. CyberSource risk management experts will check payment transaction records maintained by credit card processors, banks, merchants individual cardholders to find discrepancies that could lead to a chargeback resolution, Brock says.
“We will log into any payment processor's systems as necessary, pull down chargebacks that have been reported to merchants, then examine the reason code against available data,” he says.
The biggest opportunity for chargeback wins is in credits not processed properly or in a timely fashion, Brock says. For example, a customer calls a merchant to get a credit for a contested charge, fails to get a quick credit confirmation, then calls the bank with the same request and winds up getting two credits for the same contested charge. “If necessary, we’ll contact all three parties—the merchant, bank and cardholder—or log into the processing system to find duplicate credits,” Brock says.
The Chargeback Recovery service also makes available aggregate data related to issues among CyberSource’s client retailers that lead to chargebacks, such as problems related to product quality or customer service, Brock says. The service also provides data to show the likelihood that a merchant can successfully challenge a particular type of chargeback, he adds.
CyberSource charges for the service by taking a share of funds recouped for merchants. The share percentage varies for each client, Brock says.
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