Last month was busy. Your marketing campaigns were a soaring success, driving traffic and revenue. 2024 is destined to be a year of success. Then you get a message from your acquiring bank, you got hit with a chargeback. Then you get hit with another and another and another. Then you’re acquiring bank sends you a message, your chargeback ratio is getting dangerously close to exceeding acceptable thresholds, and you may be on the hook for increased fees and your bank could even drop you altogether.
The above scenario is a nightmare, and it’s an all too real outcome for many businesses. Chargebacks can become an existential threat capable of derailing practically any business. There’s some good news, however. Merchants can now access powerful platforms packed with dispute and chargeback management tools. By leveraging the best chargeback software in 2024, you can dramatically reduce chargebacks, safeguarding your company.
A Quick Look at Dispute and Chargeback Management Software
What is dispute and chargeback software? In the simplest terms: any software offering tools that enable merchants to fight chargebacks and resolve disputes. In the long run, effective chargeback software should help merchants reduce the impact of chargebacks on their business.
Time is short and resources are scarce. As such, effective chargeback software also reduces the resources a company must spend dealing with disputes and chargebacks. Often, this means using automation tools to complete various tasks and integrating external tools, such as Ethoca and Verifi alerts. The best dispute management software also makes it easier to track important deadlines and submit necessary documentation.
Popular and effective tools a top-notch chargeback and dispute management platform may offer include:
- Chargeback alerts warn you of upcoming chargebacks, offering you an opportunity to refund them before they are filed. Crucially, ChargebackHelp makes it easy to access and manage Ethoca and Verifi Alerts from one dashboard.
- Dispute deflection tools send data to card-issuing banks to clarify purchases and prove the transaction was legitimate.
- Chargeback dispute management features: If a chargeback is filed, powerful chargeback software will offer tools to draft rebuttals, gather and submit evidence, track deadlines, and more.
Not every dispute management platform offers the above tools. However, the best dispute management software programs, like ChargebackHelp offer the above features and more. With these tools, merchants can lower the number of chargebacks they are hit with and also successfully refute more chargebacks that do get filed.
Why Dispute and Chargeback Management Software is a Must in 2024
Markets are intensely competitive and often merchants operate on thin margins while facing stiff competition. The best companies thrive, while underperformers may quickly be pushed out of the market, shattering an entrepreneur’s dream and destroying their livelihood.
Chargebacks can result in various negative consequences, including:
- Chargeback fees: Typically range from $20 to $100.
- Rising chargeback ratio: Results in increased financial penalties and processing costs.
- Lost revenues and inventory: Funds from a transaction may be returned to cardholders while the merchandise might be lost forever.
- Low productivity and morale: Manually dealing with chargebacks is tedious and stressful.
The good news is that the best dispute and chargeback management platforms can greatly reduce the burdens created by chargebacks.
The Many Benefits of Chargeback Software
The benefits offered by chargeback software may vary from platform to platform. At ChargebackHelp, we have worked closely with our clients to identify needs and opportunities and to offer crucial features that can safeguard your organization and ambitions. We’ll cover some of the many benefits our chargeback tools offer. However, the below list is not exhaustive and we work to steadily add new features.
Dramatically Increase Productivity
Beyond fees and lost revenues, chargebacks and disputes can consume precious labor. If you try to manage chargebacks and disputes without using software and automation tools, you may suffer low productivity and high labor costs. Given how competitive labor markets have been in recent years, allowing employees to get more done in shorter amounts of time will result in substantial savings, smoother operations, and higher productivity. All of this can boost the bottom line.
With ChargebackHelp, a variety of features have been implemented to boost productivity. For example, you can integrate and access both Verifi and Ethoca chargeback alerts, making them easier to handle. Automatic data gathering and sharing makes communication with other parties, including issuing banks, less of a burden as well.
For now, labor markets seem set to remain tight and in recent months, the unemployment rate has hit historical lows. At the same time, many merchants have seen chargeback rates climb, threatening to chew up more resources. Increasing productivity right now may prove even more crucial in the future if labor costs continue to rise and skilled talent remains hard to come by.
Automate Tasks to Reduce Errors and Boost Morale
Automation reduces the risk of human errors, like forgetting to respond by a deadline or failing to collect enough relevant evidence to successfully dispute your case. With chargeback alerts and deflection tools, a slow response can result in a fast-rising chargeback ratio and all the penalties that come with excessive chargebacks. With automated tools, you can ensure that you hit tight turnaround times without stressing out your staff.
Ultimately, chargeback software will allow your team members to process more chargebacks in a quicker amount of time. Beyond the immediate financial implications, reducing stress and tedious tasks may also increase retention and overall employee engagement. This is crucial given that Gallup found that in 2023 only about a third of employees were actively engaged with their work and low engagement will cost American businesses roughly $2 trillion per year.
Keep Chargeback Ratios Low
The chargeback ratio assigned by card networks is one of the most important metrics for many merchants. Chargebacks create a lot of headaches for card networks, acquiring banks, issuing banks, and other stakeholders. As such, card networks want to minimize chargebacks. If a particular merchant is drumming up a lot of chargebacks, it can cause issues across the ecosystem
Card networks thus compile chargeback ratios, which essentially measure how many chargebacks you have per your transactions in a given month. With Visa, if the ratio rises above just .9%, it could result in higher processing fees and other penalties. Mastercard is slightly more lenient and typically doesn’t start increasing fees until you’re above 1%. Either way, if you get hit with a mere 10 chargebacks out of a thousand transactions in the specified month, you could end up in hot water.
Keep Your Company Out of Chargeback Monitoring Programs
If your chargeback ratio gets too high, a card network may place you in a monitoring program. While in this program they may charge you higher chargeback fees. You may also have to pay for third-party auditing services and card network review fees, which cost up to $200,000 per month.
Maintain Good Relations with Partners
In addition, if you get hit with a lot of chargebacks, you may find that card networks and acquiring banks will simply refuse to work with you. Some acquiring banks specialize in working with high-risk businesses (meaning businesses that get hit with a lot of fraud), but the costs of working with these organizations are high. By minimizing chargebacks, your company can become a more attractive partner for card networks, banks, and other stakeholders, helping you secure more favorable fees.
Gather Evidence and Share Data
If a chargeback proceeds and you dispute it, whether you win or lose often comes down to the evidence you gather. Certain pieces of info can prove crucial, including:
- IP addresses
- Device IDs
- Signed shipping receipts
- Shipment tracking data
- Communications with the cardholder
Manually getting all the evidence and data in order for a single chargeback could take an hour or more. With the best chargeback management software, much of the information is gathered and sorted automatically. By using chargeback deflection tools, you can even automate sending pertinent data before the chargeback is filed.
Become Data-Driven
Many companies strive to be data-driven. In recent years, combined spending on data gathering and analysis has reached $180 billion. Powerful chargeback software can become an excellent source of data and insights. You can analyze transactions, perhaps identifying products that are most likely to produce chargebacks. From there, you can find ways to reduce them.
Ward Off Criminals
Some merchants gain a reputation for being easy to target with fraud. This includes criminals using stolen credit cards, or a legitimate cardholder abusing the chargeback process to score free stuff, which is known as first-party fraud. Chargebacks can quickly spike as fraudsters take advantage of a merchant’s lax approach. On the other hand, if a fraudster knows that a company will fight chargebacks tooth and nail, they’ll move on to an easier target.
Build an Anti-Fraud Culture
Chargebacks cost merchants more than $19 billion per year. Properly trained and motivated employees rank among the best tools for fighting fraud and crime in general. When you set up a robust chargeback management program empowered by the best anti-fraud software and other tools, you’re sending a clear signal of just how important fighting criminal activity is.
Managing Chargebacks Without Tools
Clearly, chargeback software offers a lot of benefits. However, some merchants still try to get by without leveraging these solutions. Unfortunately, this typically proves to be a poor move. Not only will you waste precious labor, but you’ll likely get hit with more chargebacks. Once the fees and other penalties are added up, the costs can be astronomical.
Verifi, a Visa company, notes that every dollar in dispute will end up costing the merchant an additional $1.50 in costs. About 60% of the costs are spent on management. With so much money at stake, failing to leverage cutting-edge chargeback fighting tools is a major mistake.
Considerations When Selecting Chargeback Software
Below, we’ve outlined some considerations to keep in mind when evaluating specific chargeback software platforms. If you’d like more insights, however, feel free to reach out.
User Friendliness is a Must
Offering powerful tools to your employees can greatly increase productivity. Of course, employees will have to learn how to effectively leverage those tools and services. At ChargebackHelp, we’ve designed our software with user experience as a priority. We also offer hands-on training and responsive client support. This way, you can get off to a fast start.
Efficiency and productivity are important aspects of user friendliness as well. For example, by integrating both Ethoca and Verifi chargeback alerts, we make it easier for your staff members to manage them. This saves time, reduces stress, and makes it less likely that the alerts will be overlooked.
Find Software That Grows and Evolves
Merchants seek to grow their business. Wherever you’re at now, you’ll still strive to raise the bar in the future. There are so many ambitions to pursue: more customers, higher profits, a stronger brand, increased revenues, and more diverse product portfolios. The best chargeback software will scale with your business. Today’s local mom & pop shop might turn into the next big chain. Your chosen chargeback software platform should support such growth.
Further, the best developers will make sure that their software evolves as threats and needs change. Fraudsters will continue to find new ways to target businesses, and consumer preferences change over time. Well-developed chargeback tools will evolve to overcome new challenges and adapt to shifting markets and consumer behavior. Software that doesn’t advance quickly becomes obsolete.
Conclusion: Finding and Utilizing Chargeback Software
Ultimately, dispute management and chargeback software is crucial to your success. If a merchant fails to properly manage their chargebacks, they will be left at a severe disadvantage compared to more proactive rivals. Reducing chargebacks and the costs they incur could turn into a competitive advantage for your business.
Finding the best chargeback software in 2024 may take effort, but if you’re reading this, you’re already off to an excellent star. Our dispute management and chargeback software offers industry-leading tools and features. We closely consider the needs of our many clients and we constantly source feedback to improve our chargeback solutions.
