Operational Excellence: Chargeback Recovery Part 2. Lessons From the Field

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.