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ReadersSpeak

"When fighting chargebacks, the
burden of proof is on the merchant.
So it's essential to have a system in
place to respond to chargebacks
within the allotted timeframes and
provide the necessary evidence to
have them dismissed. "An effective
chargeback management system
requires strategies, tools, human
resources and expertise. You must
understand what chargebacks are,
how the chargeback process works,
Benefits of chargeback management and how to determine whether
to handle chargebacks in-house or
hile we were preparing this issue's lead article on chargebacks, outsource to professionals.
Bill Hoidas, product development manager at Matrix Payment
systems, coincidentally emailed this note. We appreciate him for "If a merchant offers no rebuttal after
W sharing his perspectives on this important topic: a consumer initiates a chargeback,
the charge will be reversed and re-
"Chargebacks are an ever-present threat to ecommerce and other card-not- funded to the customer. If the mer-
present businesses, and their numbers keep growing. Few merchants can ignore chant challenges it, the chargeback
them. Left unchecked, chargebacks can be devastating to a merchant's bottom enters a chargeback representment
line and can cost them their relationships with their payment processors. To phase, where the merchant can offer
fight chargebacks effectively, you need a comprehensive system for chargeback documentation and other evidence
management. that would prove the original charge
was valid.
"The true cost of a chargeback is far
more than the amount of the origi-
nal transaction. Aside from the loss
of overhead and other costs involved
in facilitating payment transactions,
banks require merchants to pay
chargeback fees. The true cost of a
chargeback can be up to 200 percent
of the original amount. Also, proces-
sors have chargeback thresholds for
merchants. Consequences to those
who exceed thresholds range from
additional fees to account termina-
tion.

"No one-size-fits-all chargeback
management solution suits every
merchant. Look for a system that
will produce the best results ‒ as
measured by ROI metrics. If you're
winning chargebacks, recovering
revenue and seeing your overall
chargeback rate go down, your sys-
tem is working."

Is this helpful?
Please tell us whether the
information here and in the lead
article is helpful at greensheet@
greensheet.com. And send along your
perspectives on other compelling
issues in payments, too.

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