In our last post we briefly discussed some considerations when implementing a chargeback
recovery process. Here are some lessons we've learned as we've worked with
merchants on their chargeback recoveries:
o As
you examine your chargeback process, you may find lots of repeated, often
manual, tasks or sequential steps that are out of order that offer
opportunities for improvement. For example, placing the appropriate priorities on
incoming chargeback cases so that we could focus on the most profitable work
first. In one specific case, this meant recognizing certain types of
chargebacks and focusing on resolving these first since those cases have a
higher degree of success with re-presenting.
o Learning
about the characteristics and win rates of chargeback cases helps to both
establish the priorities for efficient screening and determine the
effectiveness of your re-presentment staffers. Tracking cases by reason codes,
availability of evidence (such as delivery confirmations or account access
dates and times), and time-in-process can help decide the right cases to work
on, and which staffer should be offered overtime pay for the operation to be
most profitable.
o Just
as there is a balance between detecting fraud and insulting a potential
customer, there is a balance to be sought in deciding which fraud chargeback cases
have a potential to be re-presented. In cases of identity theft, pursuing a
chargeback dispute resolution and attempting to recover funds from the victim —could
negatively impact your brand reputation. Of course, there are cases of
"friendly fraud," or customer abuse that can be effectively pursued to
a favorable conclusion, but experience is the best teacher for finding the
right balance.
When implemented with an eye towards optimization and
balance, chargeback recovery can offer an opportunity to improve collections
against some of the fraud losses you're experiencing. Add that to your overall
risk management operation (automated and manual screening, and order
rejection rate optimization), and you have a complete portfolio of tools
to reduce your fraud losses and improve operational efficiency.
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