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[ISOs and agents] can expect more conservatism in un- "The smartest payment [services] providers have risk
derwriting." In fact, some acquirers are refusing to un- rules," Eaton-Cardone said. "There needs to be real-time
derwrite accounts for merchants with histories of charge- vision [into merchant transactions] and analytics, and that
backs, Eaton-Cardone noted. "Merchants aren't the only needs to be connected to their payout models and risk
ones losing money on chargebacks. Chargebacks are the management routines." That way, any abnormal activity
enemy of everybody." can be flagged before merchandise goes out the door, she
added. Recovery strategies are also crucial. Eaton-Cardone
Not a lost cause has this advice for acquirers and their sales partners: "Re-

Merchants can and should fight chargebacks. But often quire any merchant you suspect has rising chargebacks to
they accept chargebacks, particularly those involving engage a representment service or represent chargebacks
small-dollar transactions, as too costly to fight, and thus a themselves."
cost of doing business.
Eddy concurred, stating, "It's always better to outsource
"One of the best things the industry could do to eradicate the recovery piece." Chargeback solution providers have
chargebacks is to require every merchant that gets X num- access to more data and tools than a merchant might
ber of chargebacks to respond to each and every charge- have at their disposal, he noted. And, according to Eddy,
back," Eaton-Cardone said. She noted that many merchants Chargeback Gurus' experience indicates merchants who
drop the ball by not providing all necessary transaction go it alone have a recovery rate of about 50 percent; for
information needed to challenge a chargeback. "Acquirers those who outsource the process the recovery rate is 57
need to be proactive," she emphasized. percent. "That can mean a difference of thousands of dol-
lars a month," he said. For ISOs and MLSs selling charge-
Sakasegawa pointed out that ISOs and MLSS can play an back solutions, the reward can be more trust and income.
active role in educating their customers. "They should "You're increasing the lifetime value of a relationship,"
share best practices as much as possible," he said. Eddy Eddy said.
agreed, stating that a big part of preventing chargebacks
is understanding the underlying causes: reason codes, un- Patti Murphy is senior editor at The Green Sheet and co-host of the
derlying problems in sales, marketing and fulfillment. Merchant Sales Podcast. Follow her on Twitter @GS_PayMaven.