The Ultimate Chargeback Prevention & Resolution Guide

The Ultimate Chargeback Prevention & Resolution Guide

EBOOK

The Ultimate Chargeback Prevention & Resolution Guide

Full chargeback prevention is the ultimate goal for fraud managers worldwide. Here are some of the tips you’ll get from our downloadable guide.

Whether you’re a small online shop or a global SaaS leader, you’ll know that chargeback rates can quickly ruin your most profitable months. They are not only expensive to deal with (costing between $20-100), but also incur a significant loss of time and resources.

So how do you reduce chargebacks with modern fraud prevention tools? And are there any steps you can take right away? Our downloadable guide will cover all these points, and more.

Gain An In-depth Understanding of the Chargeback Process

To begin your chargeback prevention journey, you must first understand exactly what you’re fighting against. This is why our guide begins with a definition of the terms, key players in the chargeback process, and an example of the anatomy of a dispute.

We’ll be looking at the definitions and relations between:

  • Buyer, or customer: the person who files a chargeback request. We’ll go into the numerous reasons later.
  • Merchant: the online store or business that sold the goods or services. They can either accept the chargeback, or fight it through a dispute.
  • Issuer: The bank connected to the buyer’s credit card.
  • Acquirer: The bank or financial institution that processes card payments for the merchant.
  • Payment Gateway: the software used to transfer transaction data from the merchant to the acquirer.
  • Credit card company: The organization that oversees the whole chargeback process. As we’ll see, major credit card companies have different procedures for dealing with chargebacks.

The True Cost of Chargebacks

Some retailers only measure the cost of chargebacks by looking at the admin fees. We went one step further and calculated how much the process is estimated to cost as a whole, including the time and effort of the IT, sales, or customer support teams.

Useful links: You can read the full Visa Chargeback guide here. Here are also the guides for American Express, and for Mastercard.

Current Trends and Statistics

In the book, we’ll also look at updated examples of:

  • How and why card networks are changing their rules?
  • What could make you a high-risk merchant?
  • What happens when you are placed on a high-risk list?
  • Is the 1% still valid in today’s day and age?
  • How are credit card details stolen?
  • What goes on a darknet marketplace where buyers and sellers exchange stolen CCs?

We also look at the reasons chargeback rates are shooting through the roof. We are in a perfect storm of economic uncertainty and wider availability when it comes to fraud technology, and we’ll dive into how this affects chargeback rates worldwide.

Breaking Down the Most Common Chargeback Reasons

As you may know, card networks have got entire lists of reason codes for chargeback requests. But which ones are the most often cited by customers? We’ll look at the growing trend of friendly fraud, and why it can be more of a challenge to perform adequate chargeback representment when the cardholder disputes the transaction.

More interested in collecting the right data points to dispute chargebacks? Our second guide on how to win a chargeback dispute is here. We also have a post that dives directly into how to avoid chargebacks with certain fraud tools.

The Solutions 

Merchant Tips and Tricks

A large section of the book is dedicated to giving you practical solutions you can put in place today. No need for fraud protection software at this stage, these are just adjustments you can make today to help reduce chargeback rates. 

How to Deal with Disputes

More useful tips come in the section dedicated to fighting disputes. We include a sample letter you can use as a reference for chargeback representment by adapting it to your relevant case.

Risk Management Software

Last but not least, we’ll look at the fraud prevention tools and features you should put in place today. Amongst others, we’ll explain how you can leverage solutions such as:

  • Device fingerprinting: which generates browser and device fingerprint IDs, to help you track users across incognito browsing, emulators and VPNs. Thousands of data points are collected and compared to identify bad users – even after they reinstall or update their browser.
  • Email profiling: a single email address can reveal useful information through data enrichment. You can use the social media lookup feature, and evaluate how risky the address is by looking at domain age, type, string analysis, and more…
  • Predictive Scoring: Combines machine intelligence with human insights to generate risk scores. The rules can be tweaked manually, and they can improve over time. 

We’ll also look at more technical features such as Machine-Learning engines for suggesting risk rules, behaviour analytics, and velocity rules. We’ll also discuss how you can deploy a dynamic friction system that only triggers extra verification checks when the risk score is too high. This helps legitimate users experience a seamless checkout, while those likely to be fraudsters are deterred by additional authentication requests.

And if you’re already interested in learning more about the best fraud prevention systems, don’t forget to start with our post on the dangers of the chargeback guarantee model.

Case Studies

SEON doesn’t just write books about chargebacks. We actively help reduce them for our clients. You can click on the following links to find out how a marketing automation platform slashed their chargeback rates by 95%, or how a Fiat to Crypto API startup reduced their weekly chargebacks from $40K to $0.

Download Our Guide on Chargeback Reduction Today

Don’t let fraudsters take advantage of your frictionless experience. Ensure you follow the tips and tricks highlighted in our guide, and get a full understanding of chargeback management so you can deploy the right risk management tools.

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