Page 37 - GS190901

Education

2. Chargeback breakdown by merchant error contacts that came via email or by phone can help show
where improvements need to be made.
Any chargeback that happens due to merchant error
and could have been easily prevented is categorized When merchants force customer to keep products
as a merchant error chargeback. Some such errors that they're unhappy with, or offer multiple rebuttals to
often trigger chargebacks are: complaints instead of resolving them, those customers
a. Deceptive product or service (setting unrealistic tend to develop a case of buyer's remorse and often go to
expectations) their banks to request chargebacks. Tracking chargeback
customer contact metrics will reveal a great deal of
b. Shipment error (not shipping products on time information about your customers and what they think
or tracking return shipments) about your customer service department.
c. Poor customer service (not resolving customer
complaints or responding to calls/emails on time) 5. Transaction refund analysis
d. Duplicate transaction/system errors The complexities of the card-not-present payment
e. Merchant not recognizable (the name on the ecosystem are hard for consumers to understand.
credit card statement is not identifiable by the Expecting them to grasp the nuances of a transaction's
Byzantine life cycle is unreasonable. When businesses
customer)
process transactions, customer can see them in their
online credit card provider portal or in their mobile app
3. Chargeback review by traffic source right away, but refunds can take up to 10 days to show
Ecommerce merchants don't use just one traffic source up (depending on the issuing bank).
to generate sales. They use multiple channels, which
can be a great strategy to increase sales but can also be This poses a challenge for merchants. When they issue
detrimental if the end cycle of these traffic sources is not refunds on transactions, they don't always let customers
monitored closely. know it could take up to 10 days for the refund to appear
in their banking portal or app. Some don't even notify
Merchants shouldn't just be looking at the sales numbers, customers about refunds.
but also should look at the refund rate and chargeback
rate for every active marketing channel. Merchants I've found that almost 40 percent of customers who opt
should pay closer attention to traffic sources that have for refunds end up calling their banks to file disputes.
high chargeback or refund rates when compared to Since issuing banks do not see the refunds right away,
others. they process the disputes on behalf of the customers,
leading to double revenue losses for merchants. To avoid
Merchants engaging in affiliate sales must monitor this, merchants who have issued refunds must notify
affiliate fraud level as well, especially when paying customers of this delay and ask them not to dispute
affiliates on a CPA basis. Affiliates might bring bad transactions.
traffic to merchants by using deceptive marketing A competitive advantage
practices or running incentivized offers, which can
greatly impact chargeback ratios. Merchants often don't Businesses digging deeper into chargeback analytics
realize that anything their affiliates say or advertise on have regained their buyers' trust, greatly increased their
their websites is the sole responsibility of the merchant. customer retention rate and lowered their CPA by fixing
Ensure that your affiliates don't violate your advertising operational inefficiencies.
guidelines, and don't hesitate to block their traffic if they
do. Every merchant writing off chargebacks as a cost of doing
business should rethink this strategy. Chargeback analytics
4. Chargeback customer contact analysis are a great way to understand your customers, recoup
business losses, improve operations, increase customer
When a customer reaches out to a business to resolve retention and beat your competition. If you don't have the
an issue, listening carefully and promptly remedying time, resources or tools to look at the analytics, partner with
the situation should be that business's sole aim. My a third-party provider who can help solve your chargeback
company has found that only one in 10 customers will puzzles while you focus on what you do best.
reach out to customer service to resolve an issue. The
rest will just take their business elsewhere.
Suresh Dakshina is co-founder and president of Chargeback Gurus. A
pioneer in data analytics and industry-specific risk management, he is a
Tracking chargebacks that come from customers who certified ecommerce fraud prevention specialist and Certified Payments
have reached out to your customer service department
can be good analytics for improving your customer Professional. He understands first-hand the challenges that business
satisfaction rate. Also, determining the percentage of owners face, especially when it comes to chargebacks and fraud. Contact
him at suresh@chargebackgurus.com.
37